Exempts LPG firm from procurement rules to avert gas crisis in winter
ISLAMABAD: Despite facing criticism last year, the government is once again relying on liquefied petroleum gas (LPG) imports to address the emerging gas crisis. It has permitted a subsidiary of Sui Southern Gas Company (SSGC) to bring gas without inviting bids.
Last year, the Pakistan Democratic Movement (PDM) government had granted SSGC’s LPG subsidiary exemption from Public Procurement Regulatory Authority (PPRA) rules, allowing it LPG imports without bidding. However, the PDM came in for a lot of flak from the LPG industry and dealers’ association as prices rose past the regulator’s notified rates.
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 the PPRA had forwarded recommendations for exempting Pakistan SSGC-LPG (Pvt) Limited (SLL) from Rules 9, 13, 35 and 40 of the Public Procurement Rules 2004.
The waiver was meant for procurement of spot LPG cargoes for the winter season, which would be presented to the federal cabinet for approval. SLL’s request for exemption was received by the PPRA through the Petroleum Division in a letter dated October 3, 2023.
Read LPG prices increased significantly
It was noted that earlier, following PPRA board’s recommendation, the government had on June 9, 2023 exempted SLL from Rules 35 and 40. It got the exemption for the purchase of spot LPG cargoes, approximately 20,000 tonnes per month, from April 2023 to September 2023.
The Cabinet Division said that in its meeting on October 20 the PPRA board, while considering the justification provided by SLL, decided to recommend to the government, under Section 21 of the PPRA Ordinance 2002, to give exemption for the winter season from November 2023 to March 2024. The aim was to procure 20,000 tonnes of spot cargoes, approximately four to five cargoes per month, with the stipulation to relax the period between the release of evaluation report and the award of contract.
The board also decided to recommend partial exemption from the applicability of Rule 9. “This is provided that the Ministry of Energy (Petroleum Division) considers the principle of ‘lowest price’ for the whole quantity and may consider splitting the required quantity (if needed) from various suppliers at the ‘same lowest price’ rather than procuring the required quantities at a higher price.”
After considering a summary submitted by the Cabinet Division, the cabinet approved the proposal.
