Saudi Gazette report

RIYADH — The new Petroleum and Petrochemical Law, approved by the Council of Ministers on Jan. 7, requires obtaining a license to practice any petroleum or petrochemical operations. It is also mandatory to obtain prior approval from the Ministry of Energy before issuing any licenses or approvals necessary to establish any petrochemical facility.

According to the new law, which replaced the Petroleum Products Trade Law, petroleum must be sold and purchased at the global price. It is stipulated in the law that anyone who exports a priced petroleum product outside the Kingdom without a license shall face imprisonment for a period not exceeding five years, and a fine not exceeding SR30 million or not exceeding twice the value of the petroleum product in question at the global price at the time of its seizure, whichever is higher, in addition to confiscating the seized items.

The circumstances of the crime and the difference in price between the global price and the price charged for the substance at the time of its seizure are also taken into account when assessing the penalty. The Public Prosecution, in accordance with its jurisdiction, shall undertake the investigation and prosecution before the competent judicial authority.

The law stipulates that the Ministry of Energy has the right to reject the request to issue or renew an export license for anyone proven to have violated the provisions of the law and its regulations, or who has been previously convicted of committing or attempting to commit a crime of customs smuggling of petroleum or petrochemical materials.

According to the provisions of the law, petroleum products must be sold and purchased at the global price if the purpose is to use them in production. Inspectors shall undertake, together or individually, the work of monitoring, inspection, and detecting and investigating violations of the provisions of the law and its regulations. They have the right to enter facilities, warehouses, and sites used to carry out petroleum and petrochemical operations for this purpose.

The inspectors have the right to seize anything suspected of being used in violation of the provisions of the law, regulations, and licensing conditions, at the expense of the facility. It is stipulated in the law that any person who has undertaken or participated through agreement or assistance in carrying out any of the following acts is considered a violation of the law:

Supplying the ministry or the public with false or misleading information or data related to petroleum or petrochemical operations or materials; obstructing or hindering inspectors from performing their duties stipulated in the law; carrying out or initiating any actions that lead to tampering with storage levels for the purpose of liquefying or selling it or disrupting the security and reliability of petroleum and petrochemical supplies.

The new law aims to achieve a set of goals, mainly regulating petroleum and petrochemical operations, in a manner that contributes to economic growth. This is in addition to supporting efforts to attract investments, elevate employment rates, upgrade energy efficiency, safeguard consumers and licensees, while ensuring product quality and creating a competitive environment that fuels fair economic yields for investors.

The new law also contributes to ensure the security and reliability of local petroleum and petrochemical supplies. This is on top of achieving optimal utilization of raw materials, supporting the localization of the industry’s value chain, enabling national strategies and plans, and enhancing the control and supervision of petroleum and petrochemical operations to step up compliance with laws and regulations.

This is in addition to preventing violating practices by regulating the activities of use, sale, purchase, transportation, storage, export, import, packaging, and processing of these resources.