Fuel Procurement Plan reactivates to streamline petroleum imports
The new administration headed by President Ranil Wickremesinghe is ready to reactivate the regular fuel procurement plan which was abandoned last year and introduce a fuel information management system along with the national fuel pass with QR code with effect from tomorrow, Energy Ministry sources disclosed.
This is aimed at providing fuel to the people in a methodical manner where the pumping at petrol sheds would be rationed under a limited weekly quantity as the government is in financial difficulty in paying for petroleum imports due to the severe forex crisis.
The procurement plan 2021-2023 for crude oil and refined petroleum products prepared by a high powered committee had to be abandoned due to a rapid increase in global oil prices especially after Russia’s invasion of Ukraine, a high ranking official of the Energy Ministry told the Business Times.
He noted that the Sapugaskanda oil refinery had to close down several times since mid last year as a result of the halting of crude oil imports owing to high global prices, forcing the CPC to go for the spot purchasing of refined oil only.
The CPC has completely ignored the procurement plan 2021-2023 which had clear guidelines, details and instructions for the importation of refined oil on term tender basis in an orderly manner following proper tender procedures, a Finance Ministry observation report attached to a cabinet memorandum during 2021/2022 period revealed.
The Ministry also questioned the CPC as to why they were delaying placing new orders when the Treasury was ready to release the funds, including the premium fee to get a fuel shipment from a reputed company as soon as possible
The Energy Ministry will look into these aspects including finding dollars before reactivating the procurement plan in consultations with the Finance Ministry, a top official of the ministry said. The country needs 4000 MT petrol and 5500 MT of diesel to meet the daily demand and to achieve this requirement a diesel shipment should arrive in the island once every seven days and petrol shipment once in 10 days.
Therefore orders for fuel shipments should be placed 35 days before the arrival of the ship and the planning of procurement will have to be done at least two months ahead, he said adding that the officials of the stock review committee are fully conversant with this procedure. The fuel stock position has come down to almost zero level owing to mismanagement of the CPC owing to inefficiency and corrupt practices of some officials with connections to the fuel mafia who were behind creating a shortage of fuel without following the procurement plan, a former top official of the Ceylon Petroleum Storage Terminals Limited (CPSTL) divulged.
There were around 80 registered suppliers including 12 regular suppliers connected to international oil companies who use to bid for fuel term tenders and almost all of them are now reluctant to import oil on behalf of the CPC as it owes them millions of rupees for previous supplies, he disclosed.
Most of them have become frustrated due to bureaucratic red tape and demands for commissions as well as unnecessary interference of some officials in the procurement process of fuel, he added.
The fuel information management system aimed at eliminating queues will provide the public with visibility about the fuel stations that offer fuel, and the availability.
During the first phase, the system will be updated daily in the morning, with the information about the fuel dispatch, along with the fuel filling station details, the quantity of fuel dispatched, and the availability of stocks.
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