The State Construction Control Bureau (SCCB) has completed the procurement “Provision of the Service of Emergency Stocks for the Establishment of the State (Republic of Latvia) Emergency Stocks of Oil” and selected eight companies to be contracted by the end of this year to store a total of 352,700 tonnes of diesel fuel and petrol in Latvia, Lithuania, and the Netherlands. The estimated duration of the contracts is year 2021, while the total estimated contract price is EUR 14.6 million excluding VAT.
Svetlana Mjakuškina, Director of the SCCB, emphasises that the procurement has turned to be more advantageous, “The volume of the fuel to be stored next year in Latvia has increased reaching 63 %. Next year, the State will also save at least one EUR every month per each tonne of the fuel stored, since, in comparison with the stocks procured in 2018, the weighted average price in this procurement per one tonne storage service a month has been lower – EUR 3.45 per tonne.”
S. Mjakuškina also notes that “the system for the storage of State emergency stocks of oil as such should be reviewed in the near future. It should be also be taken into consideration that it is necessary primarily at European Union level to maintain such stocks for the needs of national economy in order to ensure that in the event of crisis fuel is available to both residents and emergency services.”
The SCCB has awarded the contract for ensuring State emergency stocks of oil in 2021 to eight companies – SIA Pirmas, SIA Circle K Latvia, SIA RDZ Energy, AS Ventbunkers, Vitol SA, Gunvor SA, UAB Okseta and UAB Baltic Petrolium.
Out of the total volume of stocks the petrol accounts for 121 thousand tonnes or 34 %, while the diesel fuel accounts for 231.7 thousand tonnes or 66 %. Accordingly, 63 % (99.5 % of diesel fuel and 0.5 of petrol) will be stored in Latvia, 34 % of petrol in the Netherlands but 3 % of diesel fuel in Lithuania.
Overall, 15 applicants participated in the first round of the SCCB procurement procedure, and all of them were recognised as appropriate and invited to submit their tenders in the second round of the procurement procedure. As a result of evaluation, out of the 10 submitted tenders 8 tenders were recognised as compliant with the conditions of the second round of the procurement procedure. The Bureau has also conducted checks on the potential places of storage of fuel within the framework of the procurement in order to make sure of the actual availability of the volume offered by tenderers in Latvia.
It has already been announced that in June the SCCB opened a procurement procedure for the provision of the service of State emergency stocks of oil for 2021. European Union (EU) Directive 2009/119/EC imposes an obligation upon Latvia, like other EU Member States, to maintain at all times compulsory stocks of oil in such a quantity which corresponds to 90 days of average daily imports in the previous calendar year. The State emergency stocks of oil should be stored by the merchants selected by a tender procedure which, in the event of a national or local energy crisis, undertake to deliver these oil products to Latvia in the required quantity.
The SCCB procurement procedure was organised in two rounds. The main procurement criteria were the most advantageous tender, without exceeding the total contract price. The place of storage of oil products was also taken into consideration in the selection of tenderers – the territory of the Republic of Latvia or other EU Member States.
In 2021, the SCCB intends to conduct checks on the emergency stocks of oil not only in terms of volume but also in terms of quality control of oil products.
Starting from 1 January 2020, the SCCB has performed functions of the central structure for the maintenance of stocks organising procurement for the service of emergency stocks for the establishment of the State emergency stocks of oil, as well as administered this service.