Litro to announce new empty cylinder tender
After procuring 100,000 metric tonnes (MT) of LP gas at a high price of US$129 per MT by rejecting the lowest bid of $96 in the tender for 280,000 MT, Litro Gas Lanka Ltd is now planning to procure empty cylinders in small quantities cancelling the previous tender for 735,540 such cylinders floated early this year.
The aim is to meet the shortage of new empty cylinders in the local market at present as most people want to keep a back up in the event of another severe shortage due to the dollar crisis, a senior official of Litro Gas Lanka told the Business Times.
He added that the company is not in a position to import a large quantity of 735,540 empty cylinders comprising 12kg, 5kg and 2.3kg cylinders for the years 2022-2023 and therefore it has decided to cancel that tender.
A short term, small quantity tender to procure 25,000 to 30,000 empty cylinders will be called in August this year to meet the urgent demand at present, he disclosed adding that the company is not in a position find dollars for large quantity purchases.
While thousands of consumers are waiting to buy a new gas cylinder, Litro Gas Lanka is creating an artificial shortage of new empty cylinders purposely delaying the procurement process, several suppliers of such metal cylinders complained.
They allege that that some officials at Litro Gas are delaying the tender process so as to call for spot purchase, thereby making procurement at a higher price similar to their recent controversial LP Gas deal.
The previous tender for empty cylinders was called by Litro back in 2019. Thereafter new tenders were called on January 12, 2022 for 735,540 numbers of empty cylinders.
When bids closed on February 24, 2022, five companies had submitted bids. They were – Metal Mate Cylinder Company of Thailand, SMPC Cylinder Company, Thailand, Linh Gas Cylinder Company, Thailand, Hubei Daly Cylinders, China and Confidence Petroleum, India.
As per tender conditions, all bidders were supposed to submit required samples before February 23, 2022, however at the request of one bidder, Litro Gas extended the sample delivery date up to March 25, 2022 and thereafter again extended it to April 7, 2022, by which the evaluation process was delayed by six weeks.
As per available information, Litro Gas had still not finalised this tender evaluation process thus creating an artificial shortage of cylinders in the market, several disgruntled bidders complained.
They alleged that without notifying the bidders Litro Gas has suddenly decided to call a spot purchase and try to fill the cylinder shortage in the market by procuring cylinders at a higher price bypassing the present tender.
Currently desperate consumers are forced to buy empty 12.5 kg LP gas cylinders from the black market at Rs. 25,000 and upwards.
One Litro gas distributor said the company has advised against purchasing empty 12.5 kg cylinders at present, as the actual price is around Rs. 9,000.
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