Few Oil Products to be Removed from PPRA Schedule

The government is likely to drop some petroleum products from Schedule 1 of PPRA but furnace oil will continue to be retained to avail shorter response time and bid validity, reported Business Recorder.

This issue will be discussed by the PPRA Board in its forthcoming meeting, to be held next week.

Sharing the details, sources said, the implementation status of the subject Draft Rule 2l (A) was presented in the 63rd meeting of the PPRA Board held on June 14, 2022, wherein PPRA management informed the Board that Hannan Ikram, Private Board Member in an email of May 31, 2022, pointed out that the list of petroleum products included in Schedule-l of Rule 21(A) need further justification of being included there.

The Board after thorough deliberations decided that proposed Rule 21(A) shall be presented in the next meeting in the presence of Secretary Petroleum and the private Board Member for consideration of the Board.

The email containing observations of a private board member on the list of petroleum products was also shared with the Secretary Petroleum in the Authority’s letter of June 22, 2022, for comments. Accordingly, Petroleum Division, in its letter of August 1, 2022, conveyed that the observations of a private board member are worth consideration except for Furnace Oil (FO) which is used as an alternative power generation fuel.

Average demand per annum of FO is low; however, it almost touches 20,000-25,000MT per day at peak demand season, which accounts for 5-8 cargoes/month contributing 15–20 percent of the total country’s power requirement.

During the last fiscal year, the total import of FO had been at about 2.2 million tons. Its import will be required till the time it is finally phased out. Longer international tender response time (30 days) sometimes results in over-procurement due to fear of emergency demand and therefore, FO needs to be retained in Schedule-I to avail shorter response time and bid validity.

Petroleum Division is; therefore, of the opinion that products listed at S. No. 2(f-j) of Schedule-1 of the proposed Rule 21(A), i.e., base oil (all groups) additives/ chemicals and allied petrochemicals products, bitumen, etc., can be dropped, as their market share/ dynamics are not significant enough to disrupt the county’s supply chain. Accordingly, in accordance with the decision of the PPRA Board, following proposed “Rule 21(A) of Public Procurement Rules, 2004” containing the mechanism for import of commodities to meet the demand-supply gap, is being presented for consideration and approval by the Board:

(1) Notwithstanding anything contained in the rules, the procuring agency shall use the provisions defined in this rule for procurement of such commodities referred in the Schedule-1 due to their urgent need to be placed as a public good to meet the demand-supply gap;
(2) minimum response time after the publication of the advertisement, minimum bid validity period after issuance of the evaluation report, the maximum period for filing a grievance through electronic means after issuance of the evaluation report and its subsequent redressal by the procuring agency, and minimum time for restraining from the signing of the contract after issuance of the evaluation report shall be in accordance with the Schedule-1 to these rules;
(3) advertisement will be published in at least two widely circulated newspapers or journals and suitable international websites including the websites of the Authority and the Procuring Agency itself;
(4) single-stage two envelop bidding procedure shall be adopted for the subject procurements;
(5) bidding documents shall clearly define the specifications, quality parameters, evaluation criteria, and allied national or international standards of the desired commodities in addition to the specimen contact;
(6) bidding documents shall be uploaded on procuring agency and Authority’s website and shall contain the tentative dates for the issuance of the final evaluation report and signing of contract;
(7) evaluation report will be communicated to all the bidders electronically immediately after its issuance in addition to hoisting the same on procuring agency’s, as well as, the Authority’s website
(8) If it is mentioned in the bid data sheet that the bidders may offer less quantity as required to meet the demand, the procuring agency may award the remaining quantity to the next most advantageous bidder(s), if they agree to bring the price(s) at par with the most advantageous bidder or otherwise.