QC council eyes P160-M fuel deal with Petron
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MANILA, Philippines — The Quezon City council is looking into authorizing Mayor Herbert Bautista to ink a P160-million deal with Petron Corporation for the one-year provision of fuel and other petroleum products, through the electronic fleet card, for the use of government-owned vehicles and equipment in local operations.
Likewise, the proposed council resolution, drafted by second district councilor Ramon Medalla, seeks to authorize Bautista to secure a P40 million letter of credit with the Land Bank of the Philippines (LBP) as payment security for the memorandum of agreement with Petron.
The proposed resolution has been referred for further review to the council’s committees on appropriations; on energy, water and other natural resources; and on laws, rules and internal government.
In the draft measure, Medalla said that the procurement for a year’s supply of fuel, lubricants and maintenance services, through an electronic fleet card scheme, for the use of the Quezon City government’s motor vehicles and equipment would be sealed with the Petron Corporation for P160 million.
He pointed out, “The use of electronic fleet cards in the supply of fuel, lubricants and maintenance services would ensure efficiency, economy and effectiveness in the operations of the Quezon City government.”
Article continues after this advertisementMedalla said that with the deal awarded to Petron Corporation, a memorandum of agreement (MOA), providing the terms and conditions on the use of fleet cards and related services, has been drafted.
Article continues after this advertisementThe MOA, he said, would include a provision where the Quezon City government is to make a payment security through an LBP letter of credit “to answer for any and all amounts due from the Quezon City government in favor of Petron Corporation.”
A letter of credit is issued by a financial institution or bank assuring payment to a seller of goods or services. It serves as a guarantee to the seller that goods or services will be paid, where the burden of non-payment by the buyer is transferred from the seller to the financial institution or bank.
Should the council resolution be approved, it would authorize Bautista to sign the MOA with Petron Corporation and to secure a P40-million letter of credit from the LBP “as payment security for the supply of gasoline and other related products and services” through the electronic fleet card scheme
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