APPENDIX 14
REVISED GUIDELINES ON INDEX-BASED PRICING FOR PROCUREMENT
OF PETROLEUM, OIL, AND LUBRICANT PRODUCTS
1. SCOPE AND APPLICATION
These guidelines shall govern the use, under extraordinary circumstances, of an index-based pricing
scheme for procurement of petroleum, oil, and lubricants (POL) in accordance with Section 61 of
Republic Act No. 9184 (R..A. 9184), otherwise known as "Government Procurement Reform Act" and its
Implementing Rules and Regulations (IRR)and the GPPB Guidelines for Contract Price Escalation.
These rules and procedures shall govern the procurement of POL by the national government, its
departments, bureaus, offices and agencies, including state universities and colleges, government-owned
and/or controlled corporations, government financial institutions and local government units when POL is
a major operational requirement necessary for the prosecution of their principal mandate. Procurement of
POL from retailers or dealers other than major suppliers as hereafter defined, or from those who are
engaged in the business of selling the same to the general public for ultimate consumption and which are
sold at pump prices shall not be subject to these guidelines.
2. PURPOSE
These guidelines are formulated to meet the following objectives:
2.1. To identify the conditions for the applicability of the index-based pricing scheme in the
procurement of POL products by a procuring entity.
2.2. To prescribe the rules and procedures on the use of index-based pricing scheme for the
procurement of POL.
3. DEFINITION OF TERMS
a. Bid Price -refers to the difference of the WPP of the prospective supplier less discounts given
plus delivery cost, in case of procurement using the WPP index; and the sum of MOPS or ICIS-LOR
assessments, the premium imposed and delivery cost, in case of procurement using the MOPS or
ICIS-LOR index;
b. Bulk Procurement -refers to anyprocurernent which, by the totality of its POL requirements and
by their sheer volume, necessitates procurement from major suppliers for purpose of economies of
scale.
c. Total Contract Price - refers to the aggregate of the amounts set by a procuring entity, as the
ceiling, to meet the volume requirement for each type of POL product; the value of which shall not
exceed the approved budget for the contract (ABC).