Apropos to the news story titled "PSO procures 5,214.56 tons of base oil without tender" appearing in the June 13th, 2012 edition of Business Recorder, PSO would like to clarify that this purchase was carried out as per law which resulted in savings of approximately $5 million to the national exchequer. PSO is proud of this achievement which was made possible only by procuring directly from the product manufacturer rather than through middlemen and commission agents.
The company categorically states that this purchase was carried out as per PPRA rule No 42 (d) (ii) which states "A procuring agency may engage in negotiated tendering with one or more suppliers or contractors with or without prior publication of a procurement notification" when "for technical reasons the supplies may be manufactured or delivered only by a particular supplier".
As mentioned earlier, the additive supplier (Lubrizol) had recommended Group-Il base oil manufactured by Exxon Mobil Singapore (Jurong) as the base oil of choice to PSO. This recommendation was given to facilitate PSO in attaining API certification for its lubricants range. This certification is an official recognition for lubricants world-wide and would help PSO's products to compete with the offerings from international OMCs.
As the recommended product was available from a single source namely Exxon, the tender process would only have attracted agents! middlemen who would have attached their own premiums to the actual price. By procuring directly from the manufacturer (Exxon Mobil Singapore), PSO saved almost $950 per ton in comparison to the bids received previously. Furthermore, it is highlighted that there is no mention of national security or proprietary purchases in PPRA Rule 42 as stated in the news item. Additionally the statement "If PSO purchases crude oil today, they cannot say they have saved 25-30 dollars per barrel" is also incorrect as the company does not purchase any crude oil and only deals in refined POL products.-PR
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