Planned changes in liquid fuels licences

Analysis

Planned changes in liquid fuels licences

Excise Duty Express 15/2016

The Ministry of Energy is working on an ordinance on a detailed list of liquid fuels whose production, storage or handling, transportation or distribution, trading, also abroad, requires a licence and whose imports require an entry in the register of importing entities.

Reasons for planned changes

The ordinance will contain a detailed list of products with their combined nomenclature codes (CN) which − due to their classification as liquid fuels − depending on the type of business, may require a licence or entry in the register of importing entities.

Scope of proposed changes

The ordinance will contain a detailed list of products with their combined nomenclature codes (CN) which − due to their classification as liquid fuels − depending on the type of business, may require a licence or entry in the register of importing entities. 

The bill proposes that the licence for production, storage, handling, transportation, distribution and trading, also abroad, will be required for the following liquid fuels: refinery feedstock, LPG, motor gasoline, aviation gasoline, jet gasoline, other kerosene, gas/diesel oil, light heating oil and other gas/diesel oil, heavy fuel oil and liquid biofuels with specific CN codes. The products include those with the following CN codes: 27101225, 271012 41, 271012 45, 271012 49, but also other kerosene with the following CN codes: 2710 19 25 and 2710 19 29.

The bill also specifies products which, if brought into the country, either under intra-community acquisition or imports, will require an entry into the register of importing entities. The catalogue coincides with the catalogue of licensed products, however, it also comprises white spirits and SBP, code CN 271012 21, not subject to a licence.

Practical consequences of planned changes

The bill in its present form may lead to consequences for many entities operating, in particular, outside the fuel market. The current catalogue of products specified in the bill as liquid fuels, which in line with the bill will be subject to a licence, comprises products used for other purposes, not only as gas/diesel or heating oil.

A good example may be products under codes CN 271012 25, commonly known as petroleum naphtha as well as CN 271019 29 commonly known as lighting kerosene.  These products are widely used e.g. by paint producers as additions and ingredients of paints and varnishes.

For certain businesses a licence requirement may involve securing additional permits and fulfilling additional formal requirements. Under the current provisions of the energy law entities which produce liquid fuels or trade in liquid fuels with foreign entities in order to get a licence must provide a security of PLN 10 million.

The ordinance also provides for an obligatory entry in the register of entities importing liquid fuels. However, in the current shape of the ordinance it is not clear when the licence is required and when an entity should only register as an importing entity. The above doubts are particularly serious considering possible negative consequences if entities fail to take the right actions under the new regulations.

The bill was submitted to public consultation and on 14 November this year a conference was held during which representatives of various industries proposed a number of comments to the planned ordinance. It may be expected that the Ministry of Energy will soon publish another bill. However, at the moment it is not clear to what extent the remarks offered by the entrepreneurs during the consultation will be taken into consideration. If the ordinance comes into force, new obligations will be imposed on businesses and therefore entrepreneurs should follow the works on the ordinance and carefully analyse the impact of the ordinance on their businesses.

Planned effective date

The ordinance is scheduled to come into force 14 days after publication of its final version in the Journal of Laws.

Planned changes in liquid fuels licences
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