Oil

State of compliance
 

  • Stockholding obligation

    Stockholding obligation

    Georgia holds no emergency oil stocks at present.The Secretariat assisted Georgia in aligning its legislation with the Energy Community oil acquis. A five-year Action Plan (2018-2023) for oil stockholding, the Oil Stockholding Act of Georgia and related annexes were drafted and consulted with all relevant stakeholders in the country. In December of 2017, the draft of the Oil Stockholding Act was submitted to the Ministry of Energy. The obligation is to maintain stocks of oil and/or petroleum products responding to 90 days of net import volume. The State Agency for Oil and Gas (operating under the Ministry of Economy and Sustainable Development) is stipulated as the Central Stockholding Entity (CSE). The emergency stockholding obligation applies to any economic operator, which imports or manufactures crude oil or products produced from oil and bituminous minerals on a commercial basis. Thus, from January 1, 2023, when the legislation should be in force, every compulsory stockholder will be required to hold emergency stocks equal to 25% of its imports of crude oil or petroleum products during the reference year.

    At the end of 2017 and the beginning of 2018, considerable institutional changes took place in Georgia. Namely, the Ministry of Energy was merged with the Ministry of Economy and Sustainable Development (now responsible for the energy sector). This led to a delay in the adoption of the legislation and accordingly the composition of stocks was postponed.

    Currently, the procedure is recommenced. Another round of consultations with stakeholders is planned to find solutions to previously raised concerns, such as the lack of stocking facilities; impact of the obligation on small importers; effect of such obligations on the retail prices, etc.

    Subsequently, the Draft of Oil Stockholding Act of Georgia will be updated in accordance with the Georgian legislative framework and prepared for the adoption procedure.     

  • Specific stocks

    Specific stocks

    In Georgia, there are no specific stocks but the draft Law foresees that the Minister in charge of energy may issue a decree by which it decides the constitution of specific stocks as part of the stockholding obligation. When specific stocks are constituted, the stockholding obligation remains in force for at least one year and shall be owned by the State or the Central Stockholding Entity and maintained on the territory of Georgia or the Energy Community Contracting Parties. Where a decision has been made regarding the constitution of specific stocks, the Ministry transmits a corresponding notice to the Energy Community Secretariat, detailing the composition of the specific stocks, their level in days and the duration of the obligation to hold the specific stocks.

  • Availability and accessibility

    Availability and accessibility

    In Georgia, the new draft Law foresees that the compulsory stockholders shall ensure that emergency stocks are available and physically accessible at all times. The emergency stocks shall be identifiable and accountable at any time and must be accessible for verification. These requirements apply to any emergency stocks that are commingled with other stocks held by economic operators.

  • Reporting

    Reporting

    According to the draft Law, the Central Stockholding Entity shall submit at the end of each month a statistical summary to the Statistical Agency. The summary shall include the level of compulsory emergency stocks held on the last day of each calendar month calculated based on the number of days of net imports or based on the number of days of domestic consumption. The statistical summary shall be submitted by the 25th day of the month following the reporting month. In case of keeping specific stocks, the Agency shall inform the Ministry about the level of the stocks, the products selected and the period of holding the stocks, which must be a minimum of one year. This report should be sent within 30 days of the end of the month that it refers to. The Statistical Agency submits to the Energy Community Secretariat and the European Commission monthly statistical summaries concerning any commercial stocks held within the territory of Georgia.

  • Emergency procedures

    Emergency procedures

    In the event of a disruption in supply, the release of the stocks is decided by a decree of the Minister. Where there is an effective international decision regarding the release of the stocks, the Government is entitled to decide on the release of the stocks as fulfilment of its international obligations. Where there is no effective international decision regarding the release of the stocks, yet the supply of energy products into the country has significantly and sharply decreased, the Ministry submits an application to the Energy Community Secretariat and the European Commission requesting a partial or full release of the stocks. Having obtained permission, the Government issues a decision to release the stocks.