LPG (liquefied petroleum gas) is a common energy source used in many fields. Regulations regarding LPG in Turkish law have been made with the LPG Market Law and the Law Amending the Electricity Market Law No.5307
The objective of this Law is to ensure the conduct of regulatory, guidance, surveillance and supervision activities necessary for the transparent, non-discriminatory and stable performance of market activities pertaining to the delivery of liquefied petroleum gas supplied from domestic and foreign resources to consumers in a reliable and cost-effective manner within a competitive environment.
License
It is mandatory to obtain a license in order to carry out LPG distribution, transportation and autogas vendor activities (except bottled LPG vendor activities), storage, and for manufacturing of LPG bottles, filling, inspection, repair and maintenance of LPG bottles, and establishing and operating facilities for these purposes. The evaluation of license requests is finalized within 60 days at the latest.
Distributor License
Refinery license holders regulated in the Petroleum Market Law produce LPG. Only distributor license holders can distribute LPG. Distributor license holders may not distribute to other dealers other than the dealers under their ownership or with contracts.
Distributors' domestic market share cannot exceed forty-five percent of the total domestic market. If the distributor is engaged in autogas LPG activity, it cannot apply differently to the stations and dealer stations it operates.
While performing autogas LPG activities, distribution undertakings shall have the following obligations:
- To supply LPG to autogas stations, bearing their own registered trademark and logo, with whom they have signed vendor contracts;
- Not to supply LPG to stations which have not obtained the required license, permission and certificates from the relevant public institutions and organizations;
- Not to supply bottled and bulk LPG to autogas stations;
- To supply LPG to autogas stations via vehicles, under the same registered trademark and ownership, carrying the logo and title and which are in conformity with the technical arrangements; and
- To observe autogas stations and to inform the Authority on yearly basis with final reports which contain information about autogas stations in respect of the technical arrangements and their maintenance.
While performing bulk LPG activities, distribution undertakings shall have the following obligations:
- To deliver bulk LPG only to consumers with whom they have signed contracts;
- To determine the conformity of the contracted customers -to whom they supply LPG with the related technical arrangements in respect of the bulk LPG facilities and systems established by the distribution undertaking or the customer, to perform periodic controls of these facilities and systems and not to supply LPG to the facilities which are not in conformity with the technical arrangements;
- To supply LPG via vehicles, under the same registered trademark and ownership or in their possession, carrying the logo and title and which are in conformity with the technical arrangements;
- To notify the Authority and cease supplying bulk LPG to consumers, in case the bulk LPG delivered to consumers by them is used for different purposes;
- To establish the consumer’s bulk LPG facilities in conformity with the applicable technical arrangements, and to employ expert personnel during this process and to compensate losses and damages occurred meanwhile; and
- To inform consumers about the usage of bulk LPG and about the operation of the facility; and
- To take necessary measures in order to meet timely the consumers’ requests regarding malfunction, check inspection and maintenance.
While performing bottled LPG activities, distribution undertakings shall have the following obligations:
-To establish facilities which have the required licenses and are in conformity with the related technical arrangements and to perform operating activities; to carry out a risk assessment about the facilities and the activities performed and to determine the conditions that might adversely affect the entire workplace and the environment in case they occur and to prepare an emergency action plan that determines the necessary measures to be taken, the actions to be carried out and the rules to be complied with, and to notify the highest civil authority about this plan;
- At the filling stations, to fill up the LPG bottles which only bear the distribution undertaking’s registered trademark and logo and to fill up the bottles of the companies, which have a filling contract, in accordance with the terms and conditions of the contract;
- To take all kinds of measures necessary to meet all bottled LPG needs of the vendors, in a timely manner and without delay;
- To establish the units which will be capable of carrying out the periodic inspections, specified in the technical arrangements, for the LPG bottles bearing the distribution undertaking’s registered trade mark and logo and to establish the units which will be capable of carrying out other main procedures falling outside the periodic inspections, such as repair, heat treatment, sanding, cleaning and metal plating, or to contract with entities that have the adequate qualifications to carry out these procedures;
- To perform inspection activities of the LPG bottles before, during and after filling operations; and
- To train the vendors and to inform the consumers.
Distributors can procure LPG from refineries or from abroad through import.
Transportation, Storage, Filling, Bottle Manufacturing, Bottle Inspection, Repair and Maintenance License
Licenses are issued for bulk LPG and autogas LPG transportation and storage and filling activities. Regulations on the license are made by EMRA.
Autogas Vendors
Autogas vendors shall conduct their vendor activities as per the exclusive sales contracts they will conclude with distribution undertakings.
It is mandatory that the autogas stations, storage tanks, dispensers, pumps and their parts and administrative structures are located in a safe distance away from subway lines, schools, mosques, hospitals, children’s playgrounds, heavily populated public facilities, flammable and combustible warehouses or facilities, such as natural gas rigging, storage tanks and base stations, in compliance with the technical arrangements and that they are provided within the area which is under its ownership or for which it has the right of use.
Bottled LPG Vendors
Bottled LPG vendors are not subject to a license. Any person or entity, apart from manufacturing factories, distribution undertakings and bottled LPG vendors, shall not keep LPG bottles, including the empty ones, except for personal needs; and these bottles shall not be associated with a barter or sale.
Bottled LPG vendors shall have the following obligations:
- To procure the bottles only from their own distributor, not to carry out LPG filling operations under any circumstances, and not to keep any instruments used for LPG filling within the workplaces, warehouses and transportation vehicles;
- To obtain the necessary licenses, permissions and certificates from the relevant public institutions and organizations;
- To ensure that the LPG bottle warehouses, transportation vehicles and retail sale units are in conformity with the technical arrangements;
- Not to perform bottled LPG sales to the vendors of their own distributor (except for the other vendors that are dependent on the same distributor, by the distribution undertaking’s written authorization) and the vendors of other distribution undertakings;
- In residential areas, to establish the bottle sales shops at such points easily reachable by the transport vehicles and emergency vehicles such as fire brigade and ambulances; and
- To deliver and connect, at the address, the bottles weighing more than two kilograms.
Bulk LPG Consumers
Bulk LPG customers write to supply spilled LPG from the distributor they have contracted with and obtain the relevant permissions.
Users cannot use any other word for LPG for their facility or residence.
Administrative Sanctions
EMRA is the authorized institution to inspect license holders and impose sanctions in case of violation of the legislation.
Administrative fines are imposed if the activities subject to license are carried out without obtaining a license or if the activities provided by the license are exceeded.
In case of importing LPG from abroad, administrative fines are imposed on those who do not meet the conditions determined by EMRA.
If the license holders do not fulfill their obligations, an administrative fine is imposed.
License holders who are obliged to keep national petroleum stock in accordance with Article 16 of Petroleum Market Law No. 5015 are fined separately for each ton of missing product at the date of detection.
Those who do not comply with the obligations imposed by the law, secondary legislation or license provisions, and Board decisions are imposed an administrative fine.
In case of violation of the legislation and EMRA decisions about the license holders, it is warned that the violation will be eliminated within thirty days, otherwise a temporary suspension will be made. At the end of the warning period, the activities of those who continue to be against the legislation are temporarily suspended for sixty days. In case the act, which has the possibility of correction due to its nature, is repeated within two years from the date of detection, the relevant market activity is suspended for a period of sixty days without any warning. If the detected violations are not eliminated at the end of the temporary suspension period, the license is canceled.
An administrative investigation is initiated and necessary sanctions are imposed on the license holders for the acts of fuel smuggling specified in the Anti-Smuggling Law. During the investigation process, the license is temporarily suspended.
Except for the refinery where the acts of smuggling specified in the Anti-Smuggling Law are determined, all activities subject to license are suspended temporarily by EMRA and the license of the license holders is canceled according to the decision.
In the case of a request or transaction made pursuant to this Law, if it is determined that there has been fraudulent or false declaration against the law, the license shall be revoked.
Licenses of those who install illegal products are canceled.
Judicial Remedy Against EMRA Decisions
It is necessary to first file to EMRA against the Board decisions made by EMRA. A lawsuit is filed against EMRA Board decisions within 60 days from the notification of the decision. This 60-day period is suspended in case of an file to EMRA. If the party applying to EMRA does not receive an answer within 60 days or receives a negative answer, this period continues.
A lawsuit is filed in Ankara Administrative Courts against the decisions of EMRA Board.
Appeals can be filed against the decisions of the court of first instance.
Related Council of State Decisions
“In the audit conducted at the autogas station belonging to the plaintiff, operating under the LPG autogas dealership license, it was determined that no responsible manager with a responsible manager certificate was employed. Therefore, the annulment of the Energy Market Regulatory Board (Board) decision dated … and numbered … regarding the imposition of an administrative fine of 76.142,00-TL was requested.
In accordance with the amendment made in the Law No. 5307, the requirement of warning before the administrative fine is imposed due to the act of not employing the responsible manager certificate and the application of the said rule, which is a law in favor, to the plaintiff In the face of the obligation, a new decision should be made, taking into account the provision of law in favor.” (Council of State 13th Department Case No: 2020/1602 , Decision No: 2020/2479 )
“It was determined that the plaintiff company was engaged in unlicensed autogas dealership activities and that this act is in violation of the first paragraph of Article 3 of the No. 5307 Liquefied Petroleum Gases (LPG) Market Law and the Law on the Amendment of the Electricity Market Law. The decision of the Energy Market Regulatory Authority (Board) dated 12 and numbered 11 regarding the imposition of an administrative fine of 308.194,00-TL in accordance with sub-sub-clause (2) of paragraph (2) of clause is requested.
After the title change of the company for which the LPG autogas dealership license was issued, the title changed to ... Petrol Ürünleri İnşaat Turizm Pazarlama Sanayi ve Ticaret Ltd. Şti. has been. It is clear that the plaintiff company operating at the station as of the audit date is a company that started operating after 24/07/2008 as a completely different legal entity from these companies and that the dealership activities at the station were carried out on behalf of this company. The case was dismissed on the grounds that there was no unlawfulness in the process of imposing an administrative fine on the grounds that the plaintiff company was engaged in LPG autogas dealership activities without obtaining a license.” (Council of State 13th Department Case No:2017/2706, Decision No:2020/3614 )