The government allows LPG imports without a call for tenders

Islamabad:

Despite the criticism it faced last year, the government is once again relying on liquefied petroleum gas (LPG) imports to deal with the emerging natural gas crisis. It has allowed a subsidiary of Sui Southern Gas Company (SSGC) to bring natural gas without calling for tenders.

Last year, the Pakistan Democratic Movement (PDM) government had granted an exemption to SSGC’s LPG subsidiary from Public Procurement Regulatory Authority (PPRA) rules, allowing it to import LPG without a tender. However, the PDM received a lot of flak from the LPG industry and dealer association as prices rose beyond the regulator’s notified prices.

Now, the current government has also waived PPRA rules to pave the way for direct LPG imports without seeking bids from suppliers.

In a recent meeting, the cabinet was informed that PPRA had forwarded recommendations for the exemption of Pakistan SSGC-LPG (Pvt) Limited (SLL) from Sections 9, 13, 35 and 40 of the Public Procurement Rules, 2004.

The exemption was for the procurement of spot LPG cargoes for the winter season, which would be presented to the federal cabinet for approval. SLL’s exemption request was received by PPRA through the Petroleum Directorate by letter dated 3 October 2023.

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It was noted that earlier, on the recommendation of the PPRA board, the government had on June 9, 2023 exempted SLL from Articles 35 and 40. It received the exemption to purchase spot LPG cargoes, approximately 20,000 tonnes per month, from April 2023 until September 2023.

Cabinet reported that at its meeting on 20 October the PPRA Board, while considering the justification provided by SLL, decided to recommend to the Government, pursuant to Section 21 of the PPRA Order 2002, to grant an exemption for the winter season from in November 2023 to March 2024. The target was to supply 20,000 tons of spot cargoes, about four to five cargoes per month, provided that the period between the publication of the evaluation report and the award of the contract was relaxed.

The board also decided to propose a partial exemption from the application of Article 9. “This provides that the Ministry of Energy (Department of Petroleum) considers the principle of ‘lowest price’ for the entire quantity and may consider dividing the required quantity (if necessary) from various suppliers at the ‘same lower price’ instead of procuring the required quantities at a higher price.”

After considering a summary submitted by the Cabinet, the Cabinet approved the proposal.

Published in The Express Tribune, November 16^u2023.

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