Purpose

Contract for the supply of
liquid fuel to power the Council’s fleet of
vehicles

Content

1.  Agreed to award a
contract to Certas Energy UK Ltd (04168225) for the provision of
Diesel, Gas Oil and Hydrotreated Vegetable Oil (HVO) under the
Eastern Shires Procurement Organisation (ESPO) Liquid Fuel
Framework (301_22) in accordance with Contract Standing Order (CSO)
16.5 to 16.7, for a two and a half (2.5) year term from 1st October
2024 to 31st March 2027.

 

2.  Noted that the
contract is being directly awarded to the cheapest supplier based
on margin price and small load premiums. The wholesale price of
Diesel and Gas Oil will be linked to the Platt’s Commodity
Index and the wholesale price of HVO will be per shipment into the
UK. This is the standard pricing mechanism in the fuel provision
industry. 

 

3.  Noted the estimated
contract value is £1.5m per annum (£3.7m over the
2.5-year term), this is based on estimated usage, current commodity
price of Diesel and Gas Oil (as of 29th July 2024) and the margin
and small load premium of Certas Energy UK Ltd. It does account to
purchase all fuel in HVO (Hydrotreated Vegetable Oil) and move away
from purchasing diesel. This will support the Greenwich mission of
improving environmental sustainability. Diesel purchasing framework
will be agreed and kept in place as an alternative for contingency
purposes.  

 

4.  Noted HVO will be our
preferred purchasing solution and diesel will only be selected for
delivery as an alternative to HVO in cases of supply chain issues
for contingency planning or due to financial
constraints.

 

5.  Noted that this award
was conducted using ESPOs Liquid Fuels framework agreement (301_22)
which was approved in a Business Case agreed by The Assistant
Director of Finance and the Head of Procurement on 21st July
2022. 

 

6.  Noted that the
management of the Council’s fuel arrangements and this
contract will continue to be managed via GS Plus Ltd and that a
Parent Company Guarantee may need to be provided to service this
contract with the supplier, Certas Energy UK Ltd.