Oil procurement through long-term tenders by March 2018

• JVP says spot tenders have caused Rs. 5.8 b in losses, new purchase system by 1Q

 By Skandha Gunasekara

The Government will take all measures to ensure that oil will be procured according to a long-term tender procedure by March 2018, Parliament was told yesterday.

Minister of Petroleum Resource Management, Arjuna Ranatunga, gave his assurance to the House in response to several allegations by parliamentarians that the spot tender procedure was incurring unwarranted losses for the Ceylon Petroleum Corporation.

He made these remarks while taking part in yesterday’s committee stage debate on expenditure heads coming under the his ministry.

Joint Opposition MP Gamini Lokuge charged that the CPC opted for the spot tender process as it allowed CPC officials to misappropriate public funds. 

“The authorities always go for a spot tender procedure because they can cheat and steal public money. The recent report prepared by the CPC with the Minister presiding is also focused on buying oil according to the spot tender procedure, not according to long-term tenders. As a result of this, public money is being wasted. This is very disappointing. When the recent fuel shortage occurred, neither the Minister nor the CPC Chairman was aware of the situation. It seems that they do not monitor and order oil accordingly,” he stressed, while calling on the Government to buy fuel from qualified suppliers, according to a long-term tender procedure.

Meanwhile, JVP MP Dr. Nalinda Jayatissa also criticised the spot tender procedure being followed. 

“From 23 August to 3 November 2017, the CPC had bought oil from 12 ships according to the spot tender procedure. The comparisons reveal that due to buying oil from these 12 ships, a loss of Rs. 5.8 billion has been incurred by the CPC,” MP Jayatissa said.

In response, the Minister agreed with MP Lokuge’s claims, adding that although there were over 80 registered suppliers only a handful were selected to supply the CPC.

“I agree with what MP Lokuge said. There is a registry consisting of over 80 suppliers but we have had to buy oil from only three or four of them. I accept that this system should be changed but when I make efforts to change this I have to deal with numerous problems. However, I can assure you that we will establish a system to buy oil according to a long-term tender procedure by March 2018.”