Nearly a month after inviting bids for awarding bulk LPG road transportation contracts across the country, oil marketing companies have cancelled the e-tenders.
The move came in the backdrop of tanker owners expressing reservations over certain aspects of the tenders, particularly the price band, which they complained was lower than the existing charges.
The decision of the companies — IOCL, BPCL and HPCL — presumably to have a relook, is likely to add a few weeks as the process has to be initiated all over again. But, cooking gas consumers need not worry about supplies when the existing contract ends in October. Owners of the vehicles, which are referred to as bullet tankers, have promised they will work on an ad hoc basis until the new contracts are finalised. The vehicles are crucial in terms of maintaining supplies to bottling plants.
Admitting that the discussions which followed representations by the vehicle owners led to cancellation of the tenders, oil industry officials said a new tender would be floated in about 20 days.
The tender that was cancelled, an official said, was different in more than one ways. It was the first time e-bids were invited, a price band was introduced, and the contract was for a longer period. Unlike the existing ones, which are for two years with a provision to be extended by a year, the new contract was to be for three years and extendable by up to two years.
In its appeal to oil companies as well as to the Prime Minister and the Petroleum Minister, All India Bulk LPG Transporters Federation had pointed that the price offered was less than the charges paid now. Its secretary Khushwant Singh had also emphasised on transparency in the pricing process.
Price bandAn office-bearer of the Southern Region Bulk LPG Transport Owners Association said the existing rate in the zone was Rs. 2.78 per tonne per km whereas the price band specified in the tender was Rs. 2.73 to Rs. 3.02 per tonne per km. On the price at the higher end of the band being more, he said when the existing rate was finalised the transporters had sought Rs. 4. The increase in operational costs such as spares, driver salary, insurance and taxes also need to be factored in while arriving at the rates, he said.
The rising operation costs apart, it is the annual cap on the number of subsidised cooking gas cylinders a household is entitled and the likelihood of a reduction that remains a concern for the transporters. Any move to limit supplies to households translates into the bottling plant requiring less and fewer trips for the vehicles.
