Issue - meetings

The Council currently utilises an ESPO Framework for the procurement of diesel fuel. ESPO is establishing a new framework agreement for the provision of liquid fuels from 1 October 2022. Agreement is sought to utilise this Framework.

Purpose of report

The Council currently utilises an ESPO Framework for the procurement of diesel fuel. ESPO was establishing a new framework agreement for the provision of liquid fuels from 1 October 2022. Agreement was sought to utilise this Framework.

Decision

That Cabinet approves the utilisation of the ESPO Liquid Fuel Framework for the procurement of diesel fuel from 1 October 2022 until the expiration of the Framework on 30 September 2026.

Alternative options considered and rejected

The Council could go directly out to the market, however, it was considered that this was unlikely to lead to a more competitive alternative, as the benefits of the economies of scale bought about by using the Framework would not be available.

Reason for decision

Except for two electric pool cars, the Council’s vehicle fleet was entirely comprised of diesel vehicles. Whilst opportunities to replace vehicles with alternative fuel equivalents were being explored, it was anticipated that diesel vehicles would continue to be part of the fleet until at least the expiration of the Framework.

The new framework agreement operated in a different way to its previous iteration; previously there was one supplier per region, but now there were a number of suppliers, which allowed for a greater degree of flexibility and competition.

As the Council’s volume usage was standard (approximately 2,500 litres per day) and requirements were not complex, the framework provider strongly recommended that a direct award be made to the most suitable supplier. This ensured the continuity of supply as committing to purchase fuel from one supplier would foster commitment from the supplier to the customer and ensure preferential deliveries in times of fuel supply disruption or driver shortages. This was essential for business continuity to enable the Council to continue to deliver essential services such as household waste collections and housing maintenance. The Council’s approved budget for diesel fuel for 2022/23 was £712,750.

The following points were raised during discussion:

• The cost of diesel fuel could potentially rise by an additional £200,000 in year. However, being part of the ESPO framework enabled SKDC to make savings as diesel would be procured in bulk.
• The use of the new framework would help ease pricing pressures on fuel.
• Whilst electric vehicles would be used where possible, it was unlikely that vehicles using the most fuel, such as refuse lorries, would have this option in the short term.