GAZETTE. EXTRAORDINARY . 425 ‘The Malawi Gazette Supplement, dafed 12th June, 2018, containing Regolations, Rules, ete. (No. 15A), GOVERNMENT NOTICE No. 40 LIQUID FUELS AND GAS (PRODUCTION AND SUPPLY) ACT (Car. 50:03) LIQUID FUELS AND GAS (PRODUCTION AND SUPPLY) (STRATEGIC: FUEL RESERVE STORAGE) REGULATIONS, 2018 IN EXERCISE Of the powers conferred by section 46 of the Liquid Fuels and Gas (Production and Supply) Act, T, AGGREY Masi, Minister of Natural Resources, Energy and ‘Mining, in consuliation with the Authority, make the. following Regulations ARRANGEMENT OF REGULATIONS: REGULATION PAnr PRELIMINARY PROVISION 1, Citation 2. Interpretation 3. Application PARTII—OBIECTIVES'AND MAINTENANCE OF STRATEGIC FUEL RESERVE ‘STORAGE 4. Objectives of the strategic fuel reserve storaye 5. Strategic tel reserve storage levols Pag IU—RESPONSIBILITIES OF THE AGENT 6, Management of strategic fuel reserve storage 7. Testing and inspection PART IV—RELRASE AND REPLENISHMENT OF THE STRATEGIC FUBL RESERVE STORAGE 8. Release of stocks in strategic fuel reserve storage 9. Price of the liquid fuels and gas to the final consumer ‘PART V-—FUNDING OF THE STRATEGIC FUBL RESBRVE STORAGE 10. Funding stock of strategie fuel reserve Pant VI—PeNAuries, JL General penalties ARF VII-~GENERAL PROVISIONS 12, Authority to supplement procedures Pater PRELIMINARY 1, These Regulations may be cited as’ the Liquid Fuels and Gas. Cision (Production and Supply) (Strategic Fuel Resorve Storage) Regulations, 2018.426 12th June, 2018 Tne, 2018 IMecrection 2, Tn these Regulations, unless the context otherwise requires— “Agent” means the National Oil Company of Malawi Limited, a State owned euterprise incorporated on 14th December, 2010; “Authority” has the meaning ascribed to ituider the Act and “demutrage” means penalty istessed against any party responsible Sor delay in londing or offivading of the liquid fuels or gas, Aptication 3. These Regulations shall apply to the following liquid fuels and ae {(@) gasoline (petrol); (©) automotive gasoil (diesel); (©) iMuminating kerosenes and (@) any other liquid fel or gas product as may: be determined, from time to time, by the Minister by notice published in the Gazette. ‘ Part IV—OBIECTIVE AND MAINTENANCE OF STRATEGIC FUEL RESERVE StoRagE Obiecivesor 4. The objectives ofthe strategie fuel reserve storage shall be to— peneee (0) make provision for reserves of liquid fuels products in physical. some stock in selected locutiona in Malawi, (8) ensure continuity of supply of liquid fuels and gas, at all times, ia normal conditions and in case of national or international liquid fuels and gas supply chain disruption or shortage of liquid fuels and as products, (©) respond to incidents such as natural disasters or other Interruptions of the liquid fuels and yas distribution in the eouey; (@ stabilize domestic pies of liquid fuels and yas: anc (©) maintain quality and value'of stock. Seategie 5. The strategie til reserve storage shall be maintained al aliquid ronan” Biels and: gas product holding capacity of not less than sixty, daye OF bad vontinuous ebasumption without replenishing, it accordance with rejulation Gip.s003 116 of the Liquid Fuels and Gas (Production and Supply} Regulations. Subieg: ps Paar IIl-—ResPonsiBILITiES OF THE AGENT snogsiment — 6e~<1) The Minister sball wppoint an Agent, to establish and mannge the ofaimesic—_strotegic fuel rserve siorage, storage (2) In nevordance with subregulation (1), the Agent sball be responsible for the installation, control, meaagement, monitoiing and supervision of the smooth operations of the strategic fet reserve storage facilities and ensure compliance with these Regulations, . (B) The strategic fuel reserve storage shall be maintained st’ various32th June, 2018 . ar strategie locations in Malawi, in storaye fuci ‘Agent, (8) The strategie fuel reserve storage referred to in this Regulation may be located oder or above ground, depending on the requirements of the locstion. ies owned oF reoted by the (5) Where the strategie fil reserve storage is located near @ main.railway line, the Agont shall onsure that there fs «rail siding connected to the main line to allow receipts oF dispatches of bulk fuel by rail tank wagons. 748) The Agent’shollk— “Testing nd {a@) on every occasion at which a strategic fuel reserve storage et" instalation is used, and during its operation at regular intervals or any ‘other period as may, ou good grounds, be showa by the Agent, subject the installation fo tess, inspections and control as may be necessary in order 1p determine whether the liquid fut installation is ii a proper condition and whether it complies with these Regulations, the Act or any olber “written lave, (8) keep and maintain records containing particulars of the times andthe mannor in which the tess, inspections and control have been carried out; and (6) in the planning of new installations and equipinent and! the ‘modification of existing equipment, maintain a safety level concusrent with technological development in gccordance with liqhid fuels industry good practices end international standards in the munagemeat of oil installations 2} For the purposes of efficient ‘ond effective management of thie strategic fuel reserve storage, the Agent shatl— (@ prepare, maintain and report to the Authority, on daily basis, Stock position feports stipuleting the physical quantity held ia all designated facilities, (0) prepare and submit reports of the strategic fuel reserves storage: ‘operations ox: « monthly basis or such other intervale as determined. by the Authority, indicating procurement plans and stock shavement or'any other seport that thay be requized by the Authority: and (©) comply to sot operating standards and procedures stipulated by the Authority for. fuel storage installations, and be subjected 10 inspections by the. Authority for compliance to standard opernting, procedures. PART IV-—RELBASE AND REPLENISHMENT OF THE STRATEGIC FUGL RESERVE, STORAGE 8—{1) Subject to regulation 4, the Agent shall release strategie fital Release of stock— took in strated fet (a) every month, sufficient to mest a. proportion of the monthly ‘esse racket demand, as agrees andl approved by the Authority; storage428 12th June, 2018 Pave of Tig ots nd as ‘Me fel consumer (in a case of emergency: or (© pursuant 19 an order, in writing, issued by the Minister. 2) A holder of a Wholesite Licence shall purchase fuel requirenents from the strategic fuel reserve stornge, at least onoe every month, 28 determined by the Authority, and at prices. approved by she Authority, from time to time. ) In order to ensure that the stratogic fuel reserve storage facilities ure effectively used to avoid demurrage or delays, the Agent shall notify the ‘Authority of strategie fuel reserve procurement plan and-release schedules. (4 The Agent shall submit @ schedule of strategic fuel reserve storage product releases and replenishments to the Authority and the Minister at times termined by the Authority, and any strategis feel reserve products released ‘under this part shall immediately be replenished by the Agett. (5) For the parpose of ensuring transparency, proper coordination and assurance of release of the strategic fuel reserve. storaze products into the market, the Agent shall not cause or be a cause of temporary or any shortage of liquid fucl and gas products in the local market, and the releases shall be done in close collaboration with the Authority (©) The strategie fuel reserve storage cantity and products releascd into. the focal market or sold ata price determined by the Authority.to.a Wholesale Livensee shall accordingly be reduced from, and be a substitute of, the quantity and products t0.be imported under the existing procuremest plas. (7) Whore there is bilateral arrangement between a forcign government and the Government of Malawi for the supply Of liquid fuel and gas products stock at a relatively lower cost, tho bilateral. scrangaments shall take precedence over any existing supply procurement plan: Provided that— (@) Government shall consult the Agent on the prospective bitateral arrangements, aud take info eecouat the existing. supply procurement plans; and (®) she Agent may still procure under the existing supply ‘Procurement plans, if the Agent is bound by contract to procure under those plans, 9. ‘The Authority shall determine the price of tive liquid fuels or gas 10 ‘the final consumer by taking into account, inzeralia— (@) the value of the product in the reference to spot market price or ‘ling five on board price plus the supplior’s.ex-lank margins; (8) the cost of hnulage from the ports of discharge into Malawi, inclusive of tie inlund shipping: (6) the weighted cost of storaye in the strategic fuel reserve storage facilities, (2) the weighted cost of fuel in the strategic fuel reserve storaze facilities;12th June, 2018 . 49 eee {(€) the sum of weighted costs for actual handling, depot through put osts, goods in transit insurance and transit losses; (P) government taxes and fevies imposéd on importation, transporta- ‘ion or sale of the product; and (8) the licensee's approved mark-up. Pagt V—-FUNDING OF TIKE STRATEGIC FURL. RESERVE STORAGE 10-(1) The Agent shall, upon approval by the Minister, recommend the Fopding sock initial strategie stock volumes of the strategie: fuel reserve slorage. stain ‘@) Government shall adequately fund the statogic fuel resorve storage. ‘G) The initial stock of stuategic fuel reserve storage shall be imported through financial acraagements built in the liquid fuels pricing structure. (4) The strategic fuét reserve storage shall be financed by sums of money ‘collected from a liquitt fuels levy imposed by the Ministor under section 38 of the Act, (5) The initial strategie stock shall be based on the consumption to cover atleast sixty days of the country’s liquid fuels and gas products demand (6) The procurement of the strategic fuel reserve storage stock shall be done through international competitive bidding or through bilateral ‘arrangements. () 10 all cases, the procurement of liquid fuels ond as shall be handled. 50 as to achieve efficiency in the procurement and compliance with the Act and other written [aws, (8) In onder to cover aclditionat days of vonsumption, the Agent shall, recommend to the Authority for approval, inoreasing and the build-up Of the ‘existing stock of liquid fuels and gaz. {9) The funding for the strategic fuol reserve storage shall inciude all the ‘costs related to: the procurement, infrastructure development, operation. and. -management of strategig fuel reserve storage facilities. Paar VI—Panatries 11. A person who. contravenes any provision of these Regulations Genorl ‘commits an offence ‘and is liable, on coriviction, fo imprisonment for a tetin of poultice ‘three months, PART VII~-GENERAL PROVISIONS 12, Where procedures are uot expressly provided for in these Auoriy Regulations, the Authority may do whatever is necessary, reasonable anid stpplemen permitted by applicable Iaw to enable it to effectively and completely dea! Prous ‘with the matter Before itaot . 12th June, 2018 Dated this 11th day of une, 2018, A. Mast ‘Minister of Natural Resources, (rite No. 48/2/30) Energy and the Mining into by Tne GoveRouMENE PRINTER, Lilongwe, Malinii— 5950 (Price-- 70000)