Caspian Report - Issue 06 - Winter 2014

halt transactions related to cancellation
(Art.3). In line with the new draft,
the Ministry of Energy will acquire
this competence. In the petroleum
market, it will be obligatory to gain
permission for downstream licences,
as well as self-contained storage and
dealership licences. Securities will be
taken for all licences and permits. The
Ministry of Energy will be liable for
granting licences, updating, suspending
and stopping transactions related
to cancellation. Entities found guilty of
smuggling will not be granted licences,
self-contained storage or dealership
permits.
REFINERIES MAY BECOME
DISTRIBUTORS
The current Petroleum Market Law
No. 5015 (Art.5) states that, “The refining
undertaking licensee may carry
out liquid fuel distribution activities
via its distribution company. The refining
undertaking licensee should
offer, on category basis, the same conditions
to those demanding liquid fuel
from himself as he does to his own
distribution company.” This article is
included in the new draft as it is, and
it is clearly stated that the refining
undertaking licensee can establish a
petroleum distribution company.
NATIONAL PETROLEUM STOCK
WILL BE SHAPED BY SUPPLEMEN-
TARY PETROLEUM STOCK
According to the current Petroleum
Market Law No. 5015 (Article 16),
definitions relating to national oil
stock are as follows:
For the purposes of sustaining continuation
in the market, preventing
risks in times of crisis or extraordinary
cases, a petroleum stock must
be kept at the level equal to at least
90 days’ worth, measured against the
previous year’s net import for average
daily consumption.
IN THE PETROLEUM MARKET, IT WILL BE OBLIGATORY
TO GAIN PERMISSION FOR DOWNSTREAM LICENCES, AS
WELL AS SELF-CONTAINED STORAGE AND DEALERSHIP
LICENCES.
The national petroleum stock is obtained
through the requirement that
refinery, liquid fuel and LPG distribution
licensees maintain a minimum
of 20 times the average daily supply
at their own storage or licensed storage
facilities, whether as a whole or
separately according to their status.
Loaded tankers within territorial
waters are to be transferred to refineries
and storages and crude oil, and
semi-products in refineries shall be
deemed part of the national stock liability.
The national petroleum stock
may be kept tax-free according to the
status of the storage location and relative
to the provision of the allowance
of the legislation.
Liquid fuel and LPG distribution licensees’
20 days’ supply, except for
the portion in the bottom of their
tanks, shall be taken as the minimum
operational stock of the company and
deemed part of the national petroleum
stock. In addition, eligible consumers
that consume 20,000 tons or
more of each type of liquid fuel each
year in a consumption facility shall
be obliged to stock an amount in
their storage to meet 15-days of their
consumption, and this stock shall be
considered as part of the national petroleum
stock.
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CASPIAN REPORT, WINTER 2014