Fuel marking seen to cost 6.88 centavos a liter

The government has awarded the contract to implement the fuel marking system to the joint venture between Switzerland-based SICPA SA and SGS Philippines Inc. at a cost of P0.06884 a liter.

Bingle Gutierrez, executive director of the Department of Budget and Management’s (DBM) procurement service, on Oct. 25 issued the notice of award to the two companies as they submitted the single rated responsive bid for the establishment and operation of a fuel marking and field testing system for the Bureau of Customs.

The five-year contract is subject to annual review of performance from the effective date indicated in the notice to proceed, Gutierrez said.

The notice was received and signed by SGS Philippines’ Catharina Nellie Filius on behalf of SICPA’s Christophe Georges Christian Renard.

DBM Assistant Secretary Rolando Toledo told reporters last Wednesday that fuel marking would be implemented in 2019 as the private sector partner has to undergo technical preparations first.

Last week, the Cabinet-level interagency Development Budget Coordination Committee reduced the national government’s revenue target for 2018 to P2.82 trillion from P2.85 trillion previously due to the “deferred implementation of e-receipts and fuel marking under TRAIN,” referring to the Tax Reform for Acceleration and Inclusion Act.

In August, SICPA and SGS proposed a P0.06884 a liter, inclusive of value-added tax, price for its services, below the price ceiling of P0.08 a liter over a five-year period earlier set under the terms of reference of the fuel marking program.

The SICPA-SGS joint venture became the lone remaining bidder after Texas-based Authentix Inc. backed out and did not submit a bid.

Authentix was SGS’s partner when the fuel marking system was implemented at Subic Bay Freeport Zone by former Customs commissioner Napoleon Morales years back.

The bidding process was nonetheless continued as the implementing rules and regulations of Republic Act No. 9184, or the Government Procurement Reform Act allows a single qualified proposal.

The company chosen by the government is expected to assist in establishing and operating a fuel marking system that will supply and inject fuel marker in all taxable oil products, except Jet A-1, aviation gas, crude oil and LPG; implement and manage a fuel testing program, including fuel analysis and data management, nationwide; as well as train and ensure technology transfer to BOC and Bureau of Internal Revenue personnel.

The government will pay the contract cost for the first year of up to P1.96 billion in case of overperformance in the actual volume of fuel marked.

For 2018, 21.9 billion liters of fuel were expected to enter the country’s 25 ports.