Principles Of Activity Of Liquid Fuel Stock Holder And The Procedure For The Sale Of The Liquid Fuel Stock Offered By The Liquid Fuel Stock Holder In Case Of Difficulties In Supply


Published: 2006-12-31

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Principles of activity of liquid fuel stock holder and the procedure for the sale of the liquid fuel stock offered by the liquid fuel stock holder in case of difficulties in supply

Passed 18.12.2006 Annex 106

The Regulation is established pursuant to § 7(6) of the Liquid Fuel Stocks Act

Chapter 1 GENERAL PROVISIONS 

§ 1.  Object of regulation

(1) The regulation establishes the principles of activities of the stockholder of the liquid fuel stock (hereinafter the stock) and the procedure for the sale of the oil products specified in § 2 (1) of the Liquid Fuel Stocks Act by the stockholder in case of difficulties in supply, to secure:
1) national security and survival of the population;
2) functioning of the sectors of vital national importance within the meaning of the Emergency Preparedness Act;
3) preservation of production in the event of disturbances in the import of oil products;
4) performance of obligations assumed under international agreements relating to the supply of energy and fuel.
(2) In case of difficulties in supply the tasks of the stockholder arise from the Liquid Fuel Stocks Act and legislation established on the basis thereof.
(3) The most important task of the stockholder is to make the quantity of the stock introduced into use available to the consumers of liquid fuel. At the same time, the purpose must be the fastest possible replacement of the cancelled supply quantities.

§ 2.  Introduction of stocks into use and partial quantity of stocks

(1) Pursuant to § 7 of the Liquid Fuel Stocks Act, in the event of difficulties in supply, the use of the stocks shall be decided by the Government of the Republic at the proposal of the Minister of Economic Affairs and Communications which has been approved beforehand by the crisis management committee of the Government of the Republic (hereinafter release order).
(2) Regarding the guidelines included in the release order the stockholder is not obligated to observe or perform any orders of any board or institution regarding the quantity of stock introduced into use.
(3) Pursuant to § 7 (7) of the Liquid Fuel Stocks Act the stockholder must offer the quantity of stock introduced into use to the seller of fuel and the consumer of fuel oil (hereinafter together the receiver of the stock offer).
(4) The seller of the fuel is the person who has a registration for the sale of the fuel in the meaning of the Liquid Fuel Act and who has 5 or more filling stations registered as his place of business. Regarding aviation kerosene or aviation and spirit type jet fuel (hereinafter aircraft fuel) the seller of the fuel is the persons who are payers of stockpiling fee of the specified fuel in the meaning of the Liquid Fuel Stocks Act.
(5) The consumer of the fuel oil is a person who uses heavy fuel oil for generation of heat.
(6) The quantity of the fuel offered to the sellers of the fuel for sale (hereinafter the partial quantity of stock) shall be equal to the market share of the above persons. The quantity of the heavy fuel oil offered for sale to the users of fuel oil (hereinafter the partial quantity of stock ) shall be equal to the quantity of heavy fuel oil used by the specified persons during the twelve preceding months.
(7) The calculations of the partial quantities of the stock of the sellers of fuel shall be calculated on the basis of quantities of fuel sold during the four quarters preceding the issue of the release order (e.g. release order in Junes 2005: period serving as the basis for the calculation of partial quantities of stock is QI 2005, QIV 2004, QIII 2004 and QII 2004). Partial quantities of the sellers of fuel shall be calculated separately for stock categories I and II specified in § 2 (1) of the Liquid Fuel Stocks Act. In the stock category II specified in § 2 (1) 2) of the Liquid Fuel Stocks Act the partial stock quantities of the stock of the fuel sellers shall be specified separately for the aviation spirit.
(8) For the calculation of the partial quantities of the stock of the consumers of the heating oil the quantities of heavy fuel oil used during the 12 months preceding the issue of the release order shall be taken as a basis.
(9) The partial quantities established in subsections (7) and (8) of this section form a basis for the division of the quantity of the quantity of stock introduced into use throughout the whole period of difficulties in supply starting from the first release order.
(10) The calculation of the partial quantities of the sellers of fuel shall be based on the quarterly statistics of the Tax and Customs Board pursuant to § 12 (3) of the Liquid Fuel Stocks Act. For calculation of the partial quantities of stock it shall be considered that the quantity of the fuel consumed by the sea-going vessels as bunker supplies and the fuel quantities released into consumption in Estonia but sent to another member state have been deducted and it shall not be included in the partial quantity. The sellers of fuel who have only deductible fuel quantities are not taken into account.

§ 3.  The selling price of the stock introduced into use

The stockholder has the right to sell the stocks introduced into use at the market price which shall not be lower than the weighted average acquisition cost of the relevant type of fuel. Sale at a price lower than the acquisition cost is only permitted with the authorisation of the Minister of Economic Affairs and Communications. The market price calculated on the basis of arithmetical means of the lowest and highest quotations of the respective type of fuel published in the week preceding the release of the fuel in the quotations column of publications Cargoes CIF NWE/Basis ARA of Platts European Marketscan that the stockholder may adjust pursuant to the transport costs shall be considered the market price. The calculation of the market price of the heavy fuel oil can be also based on quotations of heavy fuel oil published in the column of publications of quotations Cargoes FOB NWE of Platts European Marketscan that the stockholder may adjust pursuant to the transport costs. Regarding the quantities of fuels sold to the receivers of the stock offers within a week an invoice shall be issued immediately after the publications of notifications serving as the basis for calculation of market price.

Chapter 2 PROCEDURE FOR OFFERING STOCK FOR SALE  

§ 4.  Allocation period of the stock and notice regarding allocation

(1) The allocation period of stock is a period consisting of calendar weeks in regard of which the stockholder makes offer of the stock to the receivers of the offer of stock. The number of the calendar weeks shall be specified in the release order.
(2) The receiver of the offer of the stock shall receive a notice regarding allocation for each allocation period of the stock, containing the following information regarding each stock category:
1) period of allocation;
2) total quantity of stock introduced into the use;
3) the principle governing allocation and the volume of partial quantity of the stock of the receiver of the stock offer as a percentage of the total quantity of the stock introduced into use;
4) partial quantity of the stock of the receiver of the stock;
5) period for the assessment of the principles governing allocation.

§ 5.  Offers of stock

Immediately after the coming into force of the release order the stockholder shall send stock offers together with the notice regarding allocation of stock that are in the format of a sales contract for sale of fuel (sales offer) or a notice on the performance of the option of the contract of delegated stock. Offers can be communicated signed by facsimile or digitally signed by e-mail.

§ 6.  Sales offer

(1) The receiver of the stock offer receives a specific sales offer for the purchase of fuel in the format of a sales contract. Upon the acceptance of the receiver of the stock offer the sales offer shall be returned for the scheduled term to the stockholder signed by facsimile or digitally signed by e-mail.
(2) Partial acceptance of the quantities of fuel is not allowed. An acceptance shall not be accepted if the sales order contains amendments in the text of the sales contract or additional conditions of the receiver of the stock offer. If the receiver of the stock offer has not returned a signed sales offer to the stockholder by the scheduled term, the offer made for the allocation period shall be considered rejected by the receiver of the stock offer and thus such receiver of the stock offer cannot buy fuel from the stockholder during the respective allocation period.
(3) The quantity of fuel specified in the sales offer is equally allocated over the whole allocation period.
(4) If the partial quantity of the receiver of the stock offer per one stock category is less than 100 tons, the sales shall be performed at the price valid during the week preceding the first week of the allocation period. Fuel can be carried out of the terminal specified in the offer during the whole allocation period.

§ 7.  Performance of the option of the delegated stock contract

(1) Performance of the option of the delegated stock contract is a contract provision to sell the quantities of fuel stipulated in the contract to the stockholder or other persons specified by the stockholder.
(2) If the delegated stock contract has been signed with the receiver of the stock offer, the receiver of the stock offer can, upon receipt of a respective notice from the stockholder, use the fuel held in stock in the amount specified in the notice regarding performance of the option sent to him.

§ 8.  Security in case of sale of fuel

(1) In the event of the sale of fuel the stockholder requests securities from the receiver of the stock offer for securing the payment of the cost of fuel. The security must cover at least the cost of the total fuel quantity indicated in the sales offer. The calculation of this cost shall be based on the market price calculated pursuant to the method established in § 3 of this Regulation by the stockholder on the basis of the arithmetical average of the lowest and highest quotations of three publication days of quotations of the respective type of fuel preceding the making of sales offer. In case the market price is lower on the day of making the offer compared to the weighted average acquisition cost of the relevant type of fuel, the calculation of the security shall be based on the weighted average acquisition cost of the relevant type of fuel, which in such event must be indicated as the basis for calculation of the security in the sales offer.
(2) The security shall not be required if the invoice issued on the quantities of fuels sold within the period of one week is settled before the transfer of the fuel.
(3) The existence of the security shall be certified by a warranty of an Estonian or international credit or financial institution accepted by the stockholder in advance. The credit rating of that credit or financial institution shall be at least A3 (Moody’s) or A- (Standard and Poor’s) and the credit rating must not be reduced in the period of last three months.
(4) The security must be valid at least seven (7) days from the last day of the allocation period.
(5) The stockholder reserves the right to reject the warranty.
(6) Only a text that has been prescribed by the stockholder shall be accepted as the text of the warranty issued by a credit or financial institution.
(7) The warranty document shall be returned to the buyer of fuel after the due payment of all invoices related to the sale and purchase of the fuel of this allocation period in the correct volume.

§ 9.  Settlements

(1) An invoice regarding the quantities of fuels sold with the sales offer meeting the requirements established in § 6 of this Regulation shall be issued immediately after the publication of the quotations serving as the basis for the calculation of the market price. Term of payment shall be 7 calendar days.
(2) Should payment be delayed the stockholder shall be entitled to demand late penalty per each delayed day. Penalty rate is 0.06% per day. If necessary, the security indicated in § 8 of this Regulation.

§ 10.  Notification of the warehouse operator and acceptance of fuel

(1) The notification of the warehouse operator that is required for the transfer of ownership right from stockholder to the buyer of fuel presumes acceptance of the offer and existence of a security issued by a credit or financial institution or payment of invoice before the transfer of fuel.
(2) The fuel must be removed from the terminal specified in the acceptance within the term specified in the acceptance. Consequences resulting from delay in haulage of the fuel shall be borne by the buyer of the fuel.
(3) In case of delay in haulage of the fuel the stockholder is entitled to apply the penalty specified in the sales offer that may not exceed 10% of the cost of the fuel.

§ 11.  Repeal of the Regulation

The Resolution No. 105 of the Minister of Economic Affairs and Communications of 13 September 2005 Principles of activity of liquid fuel stock holder and the procedure for the sale of the liquid fuel stock offered by the liquid fuel stock holder in case of difficulties in supply (RTL 2005, 98, 1476) is repealed.

Edgar SAVISAAR
Minister
Marika PRISKE
Secretary General

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