No LPG shortage following award of fresh term tender soon: Litro Chairman
State-owned enterprise Litro Gas Lanka has taken every possible step to restore supplies, and even reduced prices by containing costs and it has sufficient stocks to meet the demand till the end of this year, chairman of the company Muditha Peiris told the Business Times.
He assured the public that the company will be continuing uninterrupted supply to the market following proper procurement procedure even with the difficulty in securing foreign exchange.
The latest term tender floated by Litro Gas to procure 280,000 metric tonnes of LP Gas on July 25 in which the bids were closed on August 15 is still under technical evaluation by the Finance Ministry-nominated Standard Cabinet Approved Procurement Committee (SCAPC), he added.
The decision of the committee will be made known to the company by next Wednesday, Mr. Peiris said adding that the tender procedure is being carried out properly and transparently.
While 14 companies picked up the bid documents, only OQ Trading of Oman and SIAM GAS of Singapore had submitted bids by August 15, he confirmed.
Although it has been a month since the technical bids were opened, Litro Gas is yet to open the commercial bids as evaluation of the two technical bids submitted has not yet been finalised by the Finance Ministry- nominated SCAPC.
Generally the time frame required to process a fresh tender and finalise the approval is around three months.
The present order of 100,000 metric tonnes supplied by OQ Trading is to be completed by November 2022 and Litro will have sufficient LPG supplies to meet the local demand till the end of the year, he disclosed.
He denied allegations of an attempt to call spot tenders to overcome the shortfall of LPG by delaying the ongoing tender process which would give an undue advantage to one supplier who is already in the delivery chain. It is logistically impossible for a new supplier to make quick deliveries that might be required at short notice.
A sum of US$27.5 million to $30 million is needed monthly to import LPG amidst the unwillingness of the banking sector to open Standby Letters of Credit (SBLC) and suppliers are reluctant to offer credit, a senior Finance Ministry official said.
Presently, the LPG is being imported mainly through 100 per cent advance payments, he added.
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