Mandatory Oil and Gas Reserves: What Are the Regulations? Are Retail Gas Stations Required to Maintain Oil and Gas Reserves?
How is Mandatory Petroleum Reserves Regulated?
Pursuant to the provisions of Clause 1, Article 30 of Decree 83/2014/ND-CP, the entities required to hold mandatory petroleum reserves are key traders.
Article 31 of Decree 83/2014/ND-CP (as amended and supplemented by Clause 23, Article 1 of Decree 95/2021/ND-CP) provides regulations regarding mandatory petroleum reserves as follows:
Mandatory Petroleum Reserves
1. From the effective date of this Decree, key traders in petroleum trading and key traders in petroleum production who organize a petroleum distribution system must ensure a stable mandatory petroleum reserve level of at least twenty (20) days of supply, calculated based on the average daily domestic consumption of the previous year, including the structure of types; including reserves for national energy security and mandatory circulation reserves.
2. From the effective date of this Decree, petroleum distributors must ensure a stable mandatory petroleum reserve level of at least five (05) days of supply, calculated based on the average daily domestic consumption of the previous year, including the structure of types.
3. From the effective date of this Decree, key traders in petroleum production must ensure a stable mandatory petroleum reserve level in accordance with existing regulations on petroleum reserves.
4. The mechanism for using the mandatory petroleum reserve shall be implemented in accordance with the national reserve law and/or directives from the Ministry of Industry and Trade to ensure the balance of supply and demand and stabilize the market when necessary.
Thus, key traders and petroleum distributors must ensure a stable mandatory minimum reserve level in accordance with the above regulations.
How is Mandatory Petroleum Reserves Regulated? Are retail petroleum stores required to maintain petroleum reserves? (Image from the Internet)
Are retail petroleum stores required to maintain petroleum reserves?
According to the provisions of Article 30 of Decree 83/2014/ND-CP regarding the entities required to maintain mandatory petroleum reserves as follows:
Entities Required to Maintain Petroleum Reserves
1. The entities required to maintain mandatory petroleum reserves are key traders.
2. National reserves for petroleum as prescribed by the national reserve law.
Clause 11, Article 3 of Decree 83/2014/ND-CP (as amended and supplemented by Clause 2, Article 1 of Decree 95/2021/ND-CP) defines key petroleum traders as follows:
Terms Explanation
...
11. Key traders include key petroleum trading traders and key petroleum production traders.
Key petroleum trading traders are traders who purchase petroleum directly from production plants, mix petroleum (or from enterprises entrusted with the right to purchase and sell all petroleum products of the plant in case the production plant does not directly sell petroleum products) or import petroleum to supply their system, sell to other petroleum traders, and export petroleum.
Enterprises entrusted with the right to purchase and sell all petroleum products of the refinery plant have the right to export and import petroleum products to ensure the balance of petroleum supply sources for key petroleum trading traders as guided by the Ministry of Industry and Trade.
Key petroleum production traders are traders who carry out the processing technology of distilling crude oil, petroleum products, petroleum semi-finished products, waste and other raw materials into petroleum products.
Thus, retail petroleum stores are not required to maintain petroleum reserves.
How is the key trader penalized for failing to maintain mandatory petroleum reserves?
Pursuant to the provisions of Article 30 of Decree 99/2020/ND-CP on handling violations of petroleum reserve regulations as follows:
Violations of Petroleum Reserve Regulations and Petroleum Production Materials
1. A fine ranging from 100,000,000 VND to 120,000,000 VND shall be imposed on petroleum production traders who fail to maintain the required petroleum production material reserves or maintain a lower than the prescribed minimum level.
2. A fine ranging from 120,000,000 VND to 140,000,000 VND shall be imposed on key traders who fail to maintain required petroleum reserves or maintain a lower than the prescribed minimum level.
Additionally, Article 5 of Decree 99/2020/ND-CP specifies that the fines prescribed in Chapters II, III, and IV of Decree 99/2020/ND-CP are fines applicable to organizations. In cases where administrative violations are committed by individuals, the fine shall be half of the applicable fine for organizations.
Therefore, violations of petroleum reserve regulations by key traders fall under Chapter III of Decree 99/2020/ND-CP. As such, key traders who are organizations failing to maintain mandatory petroleum reserves will be fined from 120,000,000 VND to 140,000,000 VND.
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