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Sri Lanka procures refined fuels, struggles with crude
View(s):The Ceylon Petroleum Corporation (CPC) has received “a couple of hundred” offers in response to an open call for proposals to supply fuel — crude, heavy fuel, petroleum, diesel, Managing Director Mayura Neththikumarage told the Sunday Times.
Two committees are meeting “24/7” to evaluate the offers, Dr Neththikumarage said. However, the large number of bids combined with the tightening fuel supply worldwide has made the task of selecting “genuine” suppliers difficult, industry sources said.
The CPC confirmed two agents from among the proposals for the purchase of diesel and crude, officials said, but they cancelled “when it came to signing the agreement”. Of the refined fuels, diesel is the most challenging to source, while crude, which Sri Lanka procures from the Gulf, has also been difficult to nail down.
“There are a couple of hundred proposals,” Dr Neththikumarage said. “Plenty of people think they can supply the products, but it’s not that simple.” Most suppliers now approach fuel-laden vessels on the sea, requesting pricing and offering to buy their stocks. The oil goes to the highest bidder.
“Everyone is buying,” the MD pointed out. “The problem is that the price is a bit higher than earlier.” The CPC’s two committees check the basic requirements of suppliers, quality, payment terms, etc, before referring shortlisted proposals to a technical evaluation committee.
“The processes are expedited,” he said. “Earlier, we had the Cabinet-appointed procurement committee once a week. Now, it happens even twice a day. Meetings take place on demand.”
The CPC has a skilled procurement team because purchasing takes place every week. They often handle multiple procurements a week, he pointed out, adding that the corporation also buys agrochemicals and lubricants.
“Our procurement arm is very strong, comprising a diverse, multidisciplinary team of highly capable people,” he stressed.
On Friday, a diesel shipment was unloaded while another was due (for Lanka Indian Oil Company) yesterday. Another shipment of 92 petrol is arriving for CPC.
“For refined products, there is no problem,” he maintained. “For crude, there is a problem. Right now, the shipments that were due on March 26 and early April are not coming. After that, it will be ok.”
The Sapugaskanda oil refinery produces furnace oil using crude, which is essential for power generation. To make up for this shortfall, CPC is planning to buy additional diesel and also a shipment of furnace oil.
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