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~F.1r1A ~ ;l&:" ;lit"' FEDERAL NEGARIT GAZETA

OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

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20th Year No.64 ADDIS ABABA 15th August. 2014

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CONTENTS

Proclamation No. 838/2014

Petroleum and Petroleum Products Supply Operation Proclamation ................ ....... . .... . ....... . .... .. . . . Page 7493

PROCLAMATION No. 838/2014

A PROCLAMATION TO REGULATE

PETROLEUM AND

PERTROLEUM PRODUCTS SUPPLY

OPERATION

WHEREAS, it is essential to ensure that the

petroleum and petroleum products supply operation

'l't.":,) Om04> 1J.'I.:rt;' 01'101' m.t;'T O'}oOl.:"'Ij' carried out in the country comply with accepted

Oht"J110. 'I.e 1-.';:'" OU7,f'Y.Cfl ouAIl- ouhlj·m',.'} international safety and quality standards to safeguard

u'Il.;n'l' hfl~'11. lfc;, oou1"i.,: ~ human health, property and the environment;

WHEREAS, to achieve this objective, it has

OU'IhU":'::"'= become necessary to ascertain, through follow up and

OU7~~1f= OU'Ih4-~At;' oou:(-C:(-C 'hlj' h'h"H.lJ. ;.JC supervision, the required competency, in accordance

.,'y y:W.,:'" Y'l:(-o}-,} rt,9):f eav~,." 'N':u'I:"'Ij' with the prevailing international practice, of faciliti es

f) l\ 00' Y 9):f '}l\ 9"

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oulf',.'} ouh:r"'At;'

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h4>~ A9"~ O°?,m.e4>01·

eoO:»:'" Y./'~ 'I.e e a '!.?7-

ou~n'mC hflt.'l1. (fc;,

and experts engaged in refining, storing, transporting,

distributing and retailing petroleum and petroleum

products and in related activities;

Oh,'}f'*'.f t.,Y.t.'1'P. .';.'I"hl ...... y'P. tToOl\.h NOW, THEREFORE, in accordance with

;lt1 ou'}"'] r:'" h '}4>1\ ~?; (?;) ou,P/':'" ea?,h"'l\OJ' Article 55( I) of the Constitution of the Federal

./"t}\.. n'mC "{,)~_'a'. U"i products and in related acti vit ies;

0001,.,: ~

O", '}·f"R-.r "(""p'(r 'a'P. ,v,.'("h/ ... t\.Y'P. /..:r 'Ot\.h NOW, T HEREFO RE, In accordance with

')11 I'.ID'}"'P·}- ,,').,.,. .~(; (h) oo,v!._)· r"Y.h'I'flm. Arti cle 55( I) o f the Co nstitut io n o f the Federal

,.."" 'f'.'l Un it Pr ice 9.00

Democrati c Republi c of Eth iopi a it IS hereby

procl ai med as follows:

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Federal Negarit Gazette No, 64 15th August, 2014 .. " .. page 7494

PART ONE

GENERAL

1. Short Title

This Proclamation may be and Petroleum Products Proclamation No. 838/2014" .

2. Definitions

cited as "Petroleum Supply Operation

In this Proclamation, unless the context otherwise reqUIres:

11 "petroleum" includes crude oil and any liquid or gas made from crude oil, coal, schist, shale, peat or any product of crude oil and condensate;

2/ "petroleum product" means organic compounds, pure or blended, which are derived from refining or processing of crude oil, bio-f!Jel or synthetic fuel and includes:

a) asphalt, bitumen, \ petroleum coke, and other residue prod~cts;

b) bunker or heavy residual fuel oil for combustion engine or industrial heat process such as burner for boiler or heating furnace;

c) commercial gases such as m~hane, ethane, propane, butane and other similar petroleum gases, bio gas or mixtures of such gases, whether in gaseous or liquid state;

d) benzene or diesel, bio-diesel, industrial marine diesels or synthetic diesels;

e) bio-ethanol products;

f) kerosene or other similar oils for illumination or combustion applications;

g) lubricants, base oils Qr refined and blended finished oils;

=

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I - . Federal Negarit Gazette No. 64 15th August, 2014 .... .. page 7495

h) turbo fuels for jet propulsion engines;

i) other products or by-products of petroleum crude processing having a flash point lo~er than 120 degrees celsius, as determined in a Pensky-Martens closed test apparatus;

3/ "petroleum supply operation" means activities for or in connection with the importation, exportation, refining, blending, transporting, storing, distributing, retailing of petroleum and petroleum products or any other related work including operations of institutions who buy petroleum products for their own consumption directly from wholesalers;

4/ "supply chain" includes activities, operations, installations and equipment directly or indirectly related to petroleum supply operation;

5/ "petroleum facility" means any facility for use in refining, blending, storing, transporting, exporting, importing, distributing or retailing of petroleum and petroleum products and for other related activities;

6/ "refinery" means a distillation plant for refining crude oil to yield petroleum products and liquid petroleum gas;

7/ "pipeline" means a pipeline or a network of pipelines to be used for transporting petroleum or petroleum products, including related works and equipments;

8/ "construction" means the construction of petroleum facility, excluding the construction of buildings related thereto;

9/ "blending" means mixing up of petroleum product with bio-fuel or other technological product at a limited and proportional volume for the purpose of better economic and environmental interest;

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Federal Negarit Gazette No. 64 15th August, 2014 .... .. page 7496

10/ "adulteration" means the mixing of high quality grade of petroleum product with one or more lower grade of petroleum product in violation of the prOVISIOns of this Proclamation or other relevant law which may endanger human being, other living things, the environment, equipment or machinery;

111 "storage" means holding petroJ.eum and petroleum products for a limited period of time until delivered to other storage or distribution facilities;

12/ "transportation" means transporting petroleum products from a given depot outside of the country to a depot in Ethiopia or from a local depot to another depot or to a facility from which it will be directly distributed to consumers by using different means of transportation;

13/ "distribution" means the prOVISIOn of bulk petroleum products to retail petroleum stations or bulk consumers;

14/ "wholesaler" means, without prejudice to the provisions of other law with regard to importation of petroleum and petroleum products, any person who buys petroleum and petroleum products from producer or importer and sales to retailers and where any producer or importer is involved in directly selling petroleum and petroleum products to retailers or wholesalers, he shall be considered as participating in wholesale business;

15/ "retailer" means any person who buys petroleum and petroleum products from wholesaler, importer or producer and sells to end-consumers, and where wholesaler, importer or producer sells petroleum and petroleum products directly to end-consumers, he shall be considered as participating in retail business;

16/ "certificate of competence" means a certi ficate issued to a person confirming his competence to engage, for commercial or non-commercial purpose, in refining, blending, importing, exporting, storing, transporting, distributing or retailing petroleum and petroleum products and in other related activities;

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Fedenll NegaTil Gaune No. 64 15'" August 2014 ... . .. page 7496

10/ "adulteration" means the mixing of high quality grade of petroleum product with one or more lower grade of petroleum product in violation of the provisions of this Proclamation or other relevant law which may endanger human being, other living things. the environment, equipment or machinery;

11 / "storage" means holding petroleum and petroleum products for a limited period of time until delivered to other storage or distribution facilities;

121 "transportation" means transporting petroleum products from a given depot outside of the country to a depot in Ethiopia or from a local depot to another depot or to a facility from which it will be directly distributed to consumers by using different means of transportation;

13/ "distribution" means the provision of bulk petroleum products to retail petroleum s.tations or bulk consumers;

14/ "wholesaler" means, without prejudice to the provisions of other law with regard to importation of petroleum and petroleum products, any person who buys petroleum and petroleum products from producer or importer and sales to retailers and where any producer or importer is involved in directly selling petroleum and petroleum products to retailers or wholesalers, he shall be considered as participating in wholesale business;

15/ " retailer" means any person who buys petroleum and petroleum products from wholesaler, importer or producer and sells to end-consumers, and where wholesaler • importer or producer sells petroleum and petroleum products directly to end-consumers, he shall be considered as participating in retail business;

16/ "certificate of competence" means a certificate issued to a person confirming his competence to engage. for commercial or non-commercial purpose, in refining, blending, importing, exporting, storing, transporting, distributing or retailing petroleum and petroleum products and in other related activities;

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Federal Negarit Gazette No. 64 15th August, 2014 .... .. page 7497

17/ "follow 1:lP" means the process of ensuring that petroleum facilities are working in accordance with the certificate of competence issued to ( them;

18/ "licensee" means any person who has been issued with a certificate of competence or construction permit, as the case may be, pursuant to this Proclamation;

19/ "Ministry" or "Minister" means the Ministry or the Minister of Water, Irrigation ' .and Energy, respectively;

20/ "region" means any state referred to in Article 47 (1) of the Constitution of the Federal Democratic Republic of Ethiopia and includes the Addis Ababa and Dire Dawa city administrati ons;

211 "committee" means a committee referred to in Article 26 of this Proclamation;

22/ "person" means any natural or legal person;

23/ any expressIOn In the masculine gender includes the feminine.

3. Scope of Application

11 This Proclamation shall be applicable on any petroleum and petroleum products supply operation in Ethiopia.

2/ Notwithstanding the provision of sub-article (1) of this Article, this Proclamation may not apply to the exploration, development and extraction of petroleum and transportation and storage of such petroleum within the development area as well as on petroleum supply operation for military purpose.

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Federal Negarit Gazette No. 64 15th August, 2014 ... . .. page 7498

PART TWO

CERTIFICATE OF COMPETENCE AND CONSTRUCTION PERMIT

4. Certificate of Competence

No person may engage in petroleum supply operation without having a certificate of competence pursuant to this Proclamation.

5. Application for Certificate of Competence

11 Any person who wants to engage in petroleum supply operation shall apply for certificate of competence to the Ministry.

21 The procedure for applying, evaluation and approval of the application, preconditions to be fulfilled and information and other documents to be submitted shall be determined by directive to be issued for the implementation of this ProclamatIon.

6. Issuance of Certificate of Competence

11 The Ministry shall evaluate the application filed in accordance with Article 5 of this Proclamation In terms of the conditions enumerated under sub-article (2) of this Article and Issue or deny the requested certificate of competence.

21 The Ministry, before issuing the certificate of competence, shall take the following conditions into consideration:

a) the contribution to be made in meeting the future petroleum products demand of the end-users;

b) compliance with the national energy plan and strategies;

c) the contribution it may provide to create

the spirit of competition in the petroleum and petroleum products supply industry;

d) the impact it may cause in terms of social and environmental protection;

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Federal Negarit Gazette No. 64 15th August, 2014 .. . ... page 7499

e) the impact it may cause to the public health and safety as well as employees of the organization;

f) the legal, technical and financial capacity and competence of the applicant;

g) any request or opinion of the local community on the proposed activity; and

h) other public interests that may be affected due to the proposed activity.

3/ Where the application for certificate of competence is refused by the Ministry pursuant to this Article, the reason for such refusaJ shall be notified to the applicant in writing, within the time limit determined by regulation to be issued for the implementation of this Proclamation.

i. fiJ?T "7~21Qj f,.. ... hc tD(.+T 0'''' 7. Duration and Renewal of Certificate of f-t.f.eOT 1.11.'1 "j':DJT Competence

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11 The duration and the time limit for renewal of the certificate of competence issued pursuant to this Proclamation shall be determined by regulation to be issued for the implementation of this Proclamation.

2/ The Ministry shall renew the certificate of competence, having ascertained that the certificate holder has observed the conditions provided for in this Proclamation, as well as regulation and directive to be issued hereunder.

3/ A certificate of competence shall be presumed to have been canceled if it is not renewed within the time limit determined pursuant to sub-article (1) of this Article.

8. Service Charge

The service charge that shall be paid by applicants for the issuance and renewal of certificate of competence shall be prescribed by regulation to be issued for the implementation of this Proclamation.

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Federal Negarit Gazette No. 64 15th August, 2014 ... .. . page 7500

9. Transfer of Certificate of Competence

Unless the Ministry approves in writing, certificate of competence may not be transferred to another person. - .

10. Suspension or Revocation of Certificate of Competence

A certificate of competence issued in accordance with this Proclamation may be suspended or revoked where the certificate holder:

11 violates the provisions of this Proclamation or other law regarding environmental protection, community safety, the capacity to store the minimum volume of petroleum products as distributor, number of retail fadlities under it, quality of petroleum products, adulteration of petroleum products, illegal trade of petroleum products or tax evasion;

2/ . fails , to correct within the time limit determined by regulation to be issued for the implementation of this Proclamation after _ receiving a written notice with regard to the standards and requirements to be met with respect to a petroleum facility.

11. Petroleum Facility Construction Permit

No one can undertake construction work of petroleum facility without having construction permit issued in accordance with this Proclamation, . except regular repair works and pipeline construction in an existing petroleum facility.

12. Application for Construction Permit

Any application to be tiled in request of construction permit shall contain the following information:

11 name and address of the applicant;

2/ type of the proposed construction work;

3/ significance and economic feasibility of the proposed construction work;

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A certificate of competence issued in accordance with this Proclamation may be suspended or revoked where the certificate holder:

11 violates the provisions of this Proclamation or other law regarding environmental protection, community safety, the capacity to store the minimum volume of petroleum products as distributor, number of retail fadlities under it, quality of petroleum products, adulteration of petroleum products, illegal trade of petroleum products or tax evasion;

21 fails to correct within the time limit determined by regulation to be issued for the implementation of this Proclamation after receiving a written notice with regard to the standards and requirements to be met with respect to a petroleum facility.

11. Petroleum Facility Construction Permit

No one can undertake construction work of petroleum facility without having construction permit issued in accordance with this Proclamation, except regular repair works and pipeline construction in an existing petroleum facility.

12. Application for Construction Permit

Any application to be filed in request of construction permit shall contain the following information:

I I name and address of the applicant;

21 type of the proposed construction work;

31 significance and economic feasibility of the proposed construction work;

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41 the approved plan and specification of the proposed construction work in three copies;

51 if the proposed work is fuel pipeline layout, the full delineation of points between which the proposed pipeline is intended to run and the written confirmation of its right of way from the appropriate body;

61 other particulars specified in the regulations and directives issued for the implementation of this Proclamation.

13. Validity Period of Construction Permit

Unless the proposed construction work IS commenced within 12 months after issuance of a petroleum facility construction permit, the permit shall be considered as cancelled.

14. Suspension or Revocation of Construction Permit

11 The Ministry may, by giving a one month notice, suspend a construction permit issued pursuant to this Proclamation if any term or condition thereof has not been complied with.

2/. ,The Ministry shall revoke a suspension of construction permit under sub-article (1) of this Article if the licensee has rectified the reason for the suspension within the one month notice period.

31 Where the licensee fails to rectify the reason for suspension of the permit within the om month notice period, the Ministry shall revokt the permit.

15. Usage of Permitted Construction Works

No petroleum facility constructed pursuant to , permit given in accordance with this Proclamatiol shall become operational unless the Ministry ha confirmed, in writing, that the preconditions set b a directive issued under this Proclamation ar being satisfied.

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Federal Negarit G~tte No. 64 15'" August, 2014 .. . ... page 7501

41 the approved plan and specification of the proposed construction work in three copies;

51 if the proposed work is fuel pipeline layout, the full delineation of points between which the proposed pi pel i ne is intended to run and the written confinnation of its right of way from the appropriate body;

61 other particulars specified in the regulations and directives issued for the implementation of this Proclamation.

13. Validity Period of Construction Permit

Unless the proposed construction work IS commenced within 12 months after issuance of a petroleum facility construction pennit, the permit shall be considered as cancelled.

14. Suspension or Revocation of Construction

Permit

II The Ministry may. by giving a one month notice, suspend a construction permit issued pursuant to this Proclamation if any term or condition thereof has not been complied with.

21 The Ministry shall revoke a suspension of construction permit under sub-article (I) of this Article if the licensee has rectified the reason for the suspension within the one month notice period.

31 Where the licensee fails to rectify the reason for suspension of the penn it within the om month notice period, the Ministry shall revokf the pennit .

15. Usage of Permitted Construction Works

No petroleum facility constructed pursuant to : permit given in accordance with this Proclamatiol shall become operational unless the Ministry ha confinned, in writing, that the preconditions set b a directive issued under this Proclamation ar being satisfied.

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Federal Negarit Gazette No. 64 15th August, 2014 ... . .. page 7502

16. Compliance with the Laws

1/ Any licensee shall comply with all relevant laws, standards and technical specifications relating to petroleum facility with respect to occupational health, public safety and environmental protection.

2/ Any licensee shall have the duty to keep registers and records relating to his operation and submit reports when requested by the Ministry.

3/ Any licensee shall have the duty to cooperate with any inspector assigned by the Ministry to get access to any petroleum facilitY or petroleum facility construction site to carry out inspection and monitoring activity.

PART THREE

PUBLIC HEALTH AND SAFETY AND PROTECTION OF THE ENVIRONMENT

17. Standards and Specifications

The Ministry shall cooperate with the concerned bodies in the adaptation of standards and specifications as well as code of conduct of the petroleum supply chain infrastructure and the quality of petroleum products and services'.

18. Environmental Impact Assessment

The Ministry, in consultation with the appropriate body, shall define petroleum supply operations that require environmental impact assessment by directive to be issued for the implementation of this Proclamation as a precondition for issuing certificate of competence pursuant to this Proclamati on.

19. Petroleum and Petroleum Products Spill

1/ Where there is more than 500 liters of petroleum or petroleum products spill, the custodian of the product shall report the incident to the Ministry or to the organ delegated by the Ministry within 24 hours after the incident.

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9/ charge service fees for permits and certificates of competence it issues at the rate to be determined by regulation to be issued hereunder;.

10/ issue code of conduct in respect of persons providing services under this Proclamation, and ensure its compliance;

III perform other related functions;

12/ where necessary, gives power of delegation to the appropriate regional organs.

26.Establishment of Technical Advisory Committee

II A Technical Advisory Committee (hereinafter the "Committee") is hereby established to provide advice regarding petroleum supply operations.

2/ The "Committee" shall be accountable to the Minister.

27. Members of the Committee

Members of the Committee, including the

chairperson, shall be drawn from the relevant

government organs and the private sector and be appointed by the Government; and their number shall be determined as necessary.

28. Functions of the t:ommittee

The Committee shall:

II examine and enrich, through deliberations, policies, draft laws and strategies that are studied, prepared and presented to it by the Ministry in relation with petroleum supply operations and related issues, and submit its recommendation to the Minister;

2/ advise the Minister regarding measures that it deems constructive and necessary to be taken in relation with petroleum supply operations and other related issues.

29. Meetings of the Committee

1/ The Committee shall meet twice a year; provided, however, that it may hold an extraordinary meeting at any time when necessary.

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Federal Negaril Gazette No. 64 1 SIll August. 2014 ...... page 7505

91 charge service fees for permits and certificates of competence It Issues at the rate to be detennined by regulation to be issued hereunder;.

10/ issue code of conduct in respect of persons providing services under this Proclamation.

and ensure its compliance;

111 perfonn other related functions;

121 where necessary, gives power of delegation to

the appropriate regional organs.

26.Establishment of Technical Advisory Committee

1/

21

A Technical Advisory Committee (hereinafter the "Committee") is hereby established to

provide advice regarding petroleum supply operations.

The "Committee" shall be accountable to the Minister.

27. Members of the Committee

Members of the Committee, including the

chairperson, shall be drawn from the relevant

government organs and the pri vate sector and be appointed by the Government; and their number shall be determined as necessary.

28. Functions of the tommittee

The Commi Itee shall:

II examine and enrich, through deliberations, policies. draft laws and strategies that are studied, prepared and presented to it by the Ministry in relation with petroleum supply operations and related issues, and submit its recommendation to the Minister;

21 advise the Minister regarding measures that it deems constructive and necessary to be taken in relation with petroleum supply operations and other related issues.

29. Meetings of the Committee

liThe Committee shall meet twice a year;

provided, however, that it may hold an extraordinary meeting at any time when

necessary.

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21 The presence of the majority of the members shall constitute a quorum .

3/ Decisions of the Committee shall be passed when supported by majority vote; provided, however, that the chairperson shall have a casting vote in case, of a tie .

41 Without prejudice to the provisions of this Article, the Committee may adopt its own rules of procedure for conducting meetings.

30. Penalty

PART SIX

MISCELLANEOUS PROVISIONS

Any person engaged in petroleum supply chain operation who adulterate petroleum product under his possession with any lower grade petroleum product or any other solid or liquid mat.ter in order to get unlawful benefit shall be punishable in accordance with the relevant provisions of the Trade Comp·etition and Consumers Protection Proclamation No, 813/2013.

31 . Power to Issue Regulation and Directive

l i The Council of Ministers may Issue regulations necessary for the implementation of this Proclamation.

21 The Ministry may issue directives necessary for the implementation of this Proclamation and regulations issued under sub-article (I) of this Article.

32. Inapplicable Laws

No law or practice shall. in so far as it is inconsistent with this Proclamation. be applicable with respect to matters covered by this Proclamation.

33. Transitional Provisions

Any person who has engaged in petroleum products supply chain before the effective date of this Proclamation shall make the necessary arrangements with respect to his petroleum facility and its practices to comply with the provisions of

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Federal Negarit Gazette No. 64 15th August, 2014 ... . .. page 7507

this PrOClamation and regulations and directives to be issued for the implementation of this Proclamation within the time limit determined by the Ministry . .

34. Effective Date

This Proclamation shall enter into force on the date of publication in the Federal Negarit Gazette.

Done at Addis Ababa, this 15th day of August, 2014.

MULATU TESHOME (DR.)

. PRESIDENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

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Federal Negarit Gazette No. 64 \ jlll August, 2014 ...... page 7j07

this Proclamation and regulations and directives to be issued for the implementation of this Proclamation within the time limit determined by the Ministry . .

34. Effective Date

This Proclamation shall enter into force on the date of publication in the Federal Negarit Gazette.

Done at Addis Ababa, this 15th day of August, 2014.

MULATU TESHOME (DR.)

PRESIDENT OF THE FEDER.AL DEMOCRATIC REPUBLIC OF ETHIOPIA