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Maximum fine of SR5 million for violation of LPG Distribution Law

The Ministry of Energy has presented a draft table of violations for the activities related to the Distribution Law of dry gas and liquified petroleum gas (LPG) for residential and commercial purposes. A maximum fine of SR5 million will be imposed on those who commit violation of the provisions of the law.

The table of violations include violations of the provisions of the law, as well as its executive regulations, activity regulations, the guide for providing the service of distributing and selling LPG or cooking gas, and the terms and conditions of the license or the instructions and decisions issued by the ministry. The table of violations specifies the classification of the financial fine and its amount for each violation, and the rules and criteria for its application.

The draft law stipulates that anyone who commits violation of the provisions of the law and its executive regulations, or regulations, license conditions, instructions and decisions issued by the ministry shall be punished with one or more of the following penalties: a fine not exceeding SR5 million, suspension of activity partially or completely for a period not exceeding one year, and canceling the license.

According to the provisions of the law, a fine not exceeding 10 percent of the value of the fine for the original violation will be imposed for each day until the time of the rectification of the violation, and the fine will be doubled if the violator repeated the violation within three years from the date on which the previous penalty decision became final, apart from obligating the violator to return the amounts he obtained as a result of the violation to their owners. It is also stipulated that the summary about the punitive measures will be published at the violator’s expenses in a local newspaper. This depends on the type of violation committed, its seriousness and its impact, provided that publication shall occur after the decision becomes final.

If the concerned committee decided to impose a financial fine on the violator, the fine shall be in accordance with the schedule specified for each activity without prejudice to the committee’s right to apply any other penalty it deems appropriate among the penalties stipulated in article 16 of the law.

The draft law classified violations into three main categories: high, medium, and low. It also stressed the criteria for imposing the financial fine determined by the committee. The penalty for violations is based on the seriousness of the violation, the geographical location of the firm, the size of the firm, total revenues of the violator during the fiscal year preceding the detection of the violation, the aggravating and mitigating circumstances of the financial fine, as well as the extent of the seriousness of the violation and its consequences.

The major violations include practicing the activity of transporting gas from its sources to bottling and storage facilities or the independent gas distribution network without a valid license, with a minimum fine of SR250000 and a maximum fine of SR5 million.

The grave violations of the licensee include failure to enable the temporary manager to carry out management work, failure to take actions related to the activity without prior approval from the ministry, and failure to disburse wages approved for the activity.







Saudi Gazette