CH ends deal with fuel supplier

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Saturday, April 26, 2014

THE Cebu City Government owes its fuel supplier Phoenix Petroleum Philippines Inc. a total of P30 million for diesel and unleaded gasoline.

The amount, Acting City Treasurer Diwa Cuevas said, covers deliveries made from January to April this year.

Despite this, City Hall terminated its contract with Phoenix for refusing to deliver fuel over an unpaid P1-million obligation.


Mayor Michael Rama yesterday said he signed the cancellation order for Phoenix’s contract Thursday afternoon.

City Administrator Dr. Lucelle Mercado said Phoenix has been informed of the termination of its contract with the City on Wednesday yet.

Mercado said Phoenix representatives then went to her office for a meeting.


“They told us they refused to deliver fuel because of the payables. But I also told them that they should have talked to us because they cannot just stop supplying us with fuel. We could have discussed this and addressed the problem. Now that their contract has been terminated, what can they do?” she said.

Mercado assured Phoenix though that City Hall will pay its remaining payables.

Phoenix was supposed to deliver to City Hall an average of 200,000 liters of diesel and 45,000 liters of unleaded gasoline per month for one year.

Its contract, which amounts to P105.3 million, started last January and is supposed to end in December yet; Phoenix stopped supplying diesel and unleaded gasoline since Monday.

Cuevas told reporters yesterday that Phoenix’s total collectibles has reached P37 million. The City Treasurer’s Office (CTO) released to Phoenix last Tuesday a check payment amounting to P7 million; another check amounting to P1 million was signed by Diwa yesterday.

‘No delays’

Cuevas, however, stressed that the City is not delaying any payment to Phoenix.

“We have been processing payments to them. In fact, payment for the fuel is our priority; I sign the papers right away so the supplier can be paid,” she said.

Cuevas also said processing of payment also depends on how fast the supplier submits document for billing.

Now that Phoenix’s contract has been terminated, Mercado said the City will hold a bidding again for its diesel and unleaded gasoline supply. The bidding, she said, will take less than a month.

So as not to hamper any services of the City, Mercado said they made an emergency purchase of 80,000 to 100,000 liters of diesel and unleaded gasoline with Autogas for one month.

“Once the bidding will be finished, we will stop the emergency purchase,” she said.

Published in the Sun.Star Cebu newspaper on April 27, 2014.

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