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GOVERNMENT OF THE REPUBLIC OF LITHUANIA

GOVERNMENT OF THE REPUBLIC OF LITHUANIA Oficialus vertimas 2007 11 26 GOVERNMENT OF THE REPUBLIC OF LITHUANIA RESOLUTION No 1901 of 5 December 2002 ON THE APPROVAL OF THE PROCEDURE OF BUILDING, MAINTENANCE, ACCUMULATION AND CONTROL OF STATE STOCKS OF PETROLEUM PRODUCTS AND CRUDE OIL AND ON THE APPROVAL OF THE MINIMUM AMOUNTS OF PETROLEUM PRODUCTS (As amended by Resolution No 730 of 14 June 2004) Vilnius Acting pursuant to Articles 3

(2), 4
(5), 4
(6)and 13
(2)of the Law of the Republic of Lithuania on State Stocks of Petroleum Products and Crude Oil (Valstybės žinios (Official Gazette) No 72-3008, 2002; No 63-2247, 2004), the Government of the Republic of Lithuania has resolved:
  1. To approve the Procedure of Building, Maintenance, Accumulation and Control of State Stocks of Petroleum Products and Crude Oil (as appended).
  2. To establish that enterprises which annually produce, import, bring into the country, sell or use less than 200 tons of petroleum products of category 1, category 2 or category 3 each shall be exempt from the obligation to accumulate and maintain state stocks of petroleum products and crude oil, except for aviation fuel (classified under code 2710.11.31 in the Combined Nomenclature of the European Community approved by Commission Regulation (EC) No 1789/2003 of 11 September 2003), in respect of which the minimum amount shall be 500 tons. Prime Minister Algirdas Brazauskas Minister of Economy Petras Čėsna APPROVED by Resolution No 1901 of the Government of the Republic of Lithuania of 5 December 2002 PROCEDURE OF BUILDING, MAINTENANCE, ACCUMULATION AND CONTROL OF STATE STOCKS OF PETROLEUM PRODUCTS AND CRUDE OIL I. GENERAL PROVISIONS
  3. This procedure shall regulate the building, maintenance, accumulation and control of state stocks of petroleum products and crude oil (hereinafter referred to as “stocks”) as well as the use of the stocks in excess of the level of stocks established in Article 6
(1)of the Law of the Republic of Lithuania on State Stocks of Petroleum Products and Crude Oil, and the transfer of stocks of enterprises accumulating and maintaining stocks, which intend to terminate their activities in the period of an emergency in the energy sector, to other economic entities.
  1. This Resolution shall be applicable to enterprises producing, importing and bringing into the country petroleum products, as well as to state enterprises assigned by the Ministry of Economy, which accumulate and maintain state-owned stocks of petroleum products in trust (hereinafter referred to as “assigned state enterprises”).
  2. For the purposes of this Procedure: “Enterprise producing petroleum products” shall mean an enterprise which by refining the raw materials owned by it or in any other manner produces and sells petroleum products of category 1, category 2 or category 3 in the country. The definition also covers the enterprises which use the service of petroleum product manufacturing and sell petroleum products of category 1, category 2 or category 3 in the country. “Enterprise importing petroleum products” shall mean an enterprise which imports and releases into free circulation petroleum products of category 1, category 2 or category
  3. “Enterprise under the obligation” shall mean an enterprise producing, importing or bringing into the country petroleum products which is obligated under the legal acts in force in the Republic of Lithuania and under this Procedure to accumulate and maintain the share of stocks assigned to it, as well as an assigned state enterprise which accumulates and maintains the state-owned share of stocks in trust. Other concepts used in this Procedure shall be understood in accordance with their definitions in the Law on State Stocks of Petroleum Products and Crude Oil of the Republic of Lithuania. II. NOMENCLATURE OF STOCKS
  4. Stocks of the following products shall be accumulated: 4.
  5. motor petrol, aviation fuel and jet fuel of gasoline type (category 1 of petroleum products); 4.
  6. diesel fuel, gas oil, kerosene, jet fuel of kerosene type (category 2 of petroleum products); 4.
  7. heating oil (fuel oil) (category 3 of petroleum products).
  8. Part of the stocks may be accumulated in the form of crude oil or intermediate products, as prescribed in paragraphs 18 and 19 of this Procedure.
  9. The specific nomenclature of the petroleum products to be accumulated by enterprises under the obligation shall be established by the Ministry of Economy. III. FUNDS
  10. The Ministry of Economy shall calculate the amount of funds necessary to accumulate and maintain state-owned stocks and shall submit recommendations to the Ministry of Finance regarding the inclusion of the funds into a separate special programme.
  11. Assigned state enterprises shall accumulate and maintain stocks using: 8.
  12. the funds of the State Budget of the Republic of Lithuania; 8.
  13. own resources of the enterprises; 8.
  14. other lawfully acquired funds.
  15. Funds appropriated for accumulating stocks owned by the state as well as funds received from the sale of state-owned stocks may only be used for accumulating state-owned stocks.
  16. Other enterprises under the obligation, except for assigned state enterprises, shall use their own resources to cover all the costs related to the accumulation and maintenance of the stocks entrusted to them.
  17. Enterprises under the obligation shall, by March 1 every year, file a statement of the costs of storage and maintenance of stocks of petroleum products with the Ministry of Economy. The form of the statement of costs of storage and maintenance of petroleum product stocks shall be set by the Ministry of Economy. The costs of storage and maintenance of one ton of stocks may be made public. IV. AMOUNT OF STOCKS
  18. Calculating on the basis of the average daily internal consumption in the preceding calendar year of petroleum products of category 1, category 2 and category 3, stocks sufficient for the specified period (expressed in days) must be accumulated and maintained by the specified dates: 12.
  19. by 31 December 2003 – for at least 49 days; 12.
  20. by 31 December 2004 – for at least 56 days; 12.
  21. by 31 December 2005 – for at least 63 days; 12.
  22. by 31 December 2006 – for at least 69 days; 12.
  23. by 31 December 2007 – for at least 76 days; 12.
  24. by 31 December 2008 – for at least 83 days; 12.
  25. by 31 December 2009 – for at least 90 days.
  26. Every year, by March 1, the Ministry of Economy must: 13.
  27. calculate the (average) daily consumption of petroleum products of category 1, category 2 and category 3 during the preceding calendar year; 13.
  28. calculate the amount of stocks which has to be accumulated (in tons). When calculating these amounts of petroleum products of each category, the amount of petroleum products consumed in the country in the preceding year shall be reduced by the amount of oil extracted indigenously in the country in the actual year, recalculated into petroleum products up to the maximum of 25% of the internal consumption of petroleum products of each category; 13.
  29. determine the composition and amounts of stocks to be accumulated as well as the annual accumulation obligations for enterprises under the obligation. The composition and amounts of stocks to be accumulated and the annual accumulation obligations laid down for enterprises under the obligation shall be valid until the composition and amounts of petroleum products as well as annual accumulation obligations are determined for the next year.
  30. In the period from 2003 to 2008, assigned state enterprises and enterprises producing petroleum products must fulfil the imposed new annual petroleum product accumulation obligations within the period from March 31 to December 31 each year, whereas starting from 2009, the period for fulfilment shall be from March 31 to July
  31. The enterprises importing and bringing into the country petroleum products must accumulate the amounts of stocks specified in the annual accumulation obligations within 15 days after their importation or bringing into the country. V. ACCUMULATION OF STOCKS
  32. Stocks must be accumulated in accordance with the accumulation obligations imposed by the Ministry of Economy by: 15.
  33. assigned state enterprises. These enterprises shall each accumulate 50% of petroleum products of each category to be accumulated in the country; 15.
  34. enterprises producing petroleum products. Stock accumulation obligations shall be determined in proportion to the share of category 1, category 2 and category 3 petroleum products produced and sold in the country by these enterprises in the total internal consumption of the petroleum products of above-listed categories, taking into account the amount of stocks accumulated during the previous years; 15.
  35. enterprises importing and/or bringing petroleum products into the country. Stock accumulation obligations shall be determined in proportion to the share of category 1, category 2 and category 3 petroleum products which the said enterprises imported and released for free circulation as well as brought into the country, in the total internal consumption of petroleum products of the above-listed categories, taking into account the amount of stocks accumulated during the previous years.
  36. The obligation to accumulate and maintain stocks comes into force for the enterprises when they exceed the amount of produced, imported, brought into the country, sold and consumed petroleum products of category 1, category 2 and category 3, prescribed by the Government of the Republic of Lithuania. The accumulation of stocks shall begin when the obligation comes into force. The level of stocks to be accumulated shall be calculated on the basis of the average daily internal consumption in the preceding calendar year.
  37. Petroleum products imported and/or brought into the country as stocks by assigned enterprises shall be included in the share of stocks accumulated using state funds. In such a case, assigned state enterprises shall be exempt from additional stock accumulation obligations in respect of import and/or bringing into the country.
  38. Part of the stocks may be accumulated in the form of crude oil or intermediate products. In such a case, crude oil and intermediate products shall be recalculated into petroleum products of category 1, category 2 and category 3 according to the amounts obtained during the preceding calendar year from the refineries operating in the Republic of Lithuania. The foregoing shall apply to not more than 40% of the petroleum products of category 1 and category 2, and to not more than 50% of the petroleum products of category
  39. Every enterprise under the obligation, intending to store part of the stocks in the form of crude oil or intermediate products, must file a written application with the Ministry of Economy requesting authorisation and seeking to reach an agreement as regards the amounts of stocks.
  40. With regard to the changing market conditions and in order to maintain the petroleum product stocks at least at the level set in paragraph 12 of this Procedure, the Ministry of Economy may revise, during the current year, the stock accumulation obligations imposed on enterprises under the obligation.
  41. In contingency situations, when carrying out urgent repairs or other works, enterprises under the obligation may, with a written consent of the Ministry of Economy, reduce the amounts of stocks to be accumulated and maintained by them for a period not exceeding one month. VI. STORAGE OF STOCKS
  42. Stocks must be stored in oil/petroleum products storage facilities/terminals (hereinafter referred to as “terminals”) within the territory of the Republic of Lithuania. In cases provided for by international agreements to which the Republic of Lithuania is a party, stocks may also be stored in other states. A decision on the storage of part of stocks in other states shall be taken by the Government of the Republic of Lithuania.
  43. Terminals must be fitted out and used in compliance with the requirements of this Procedure and legal acts in force in the Republic of Lithuania.
  44. Terminals must be fitted out and used in such a way as to make it possible to draw from them and transport petroleum products to the site of their consumption by road, rail or pipeline. For this purpose, access roads must be repaired and continuous supply of electricity must be ensured.
  45. Stocks may be stored in tax warehouses.
  46. Stocks must be stored in metrologically verified (calibrated) stationary storage tanks.
  47. Stocks may be stored together with industrial/commercial stocks of enterprises.
  48. The Ministry of Economy must be informed of the stock storage sites.
  49. The following may not be treated as stocks: 29.
  50. indigenous crude oil not yet extracted; 29.
  51. supplies intended for the bunkers of sea-going vessels or held in bunkers of sea-going vessels; 29.
  52. supplies intended for direct transit; 29.
  53. supplies in pipelines, in road tankers or rail tank-wagons; 29.
  54. supplies held by the armed forces or those intended for them; 29.
  55. supplies stored in retail outlets; 29.
  56. irretrievable remainder in reservoirs.
  57. Petroleum products treated as stocks must meet the obligatory quality indicators and standard requirements as well as technical conditions prescribed under laws for the petroleum products consumed in the country. The stocks held in the form of accumulated intermediary products must be of the quality which would make them capable of being processed into final products.
  58. Responsibility for the quality of stocks shall rest with the enterprises which are under the obligation to accumulate stocks.
  59. The accumulated stocks must be stored for an indefinite period or until a special direction by the Ministry of Economy, except when an enterprise under the obligation goes bankrupt or terminates its activities.
  60. Enterprises importing and/or bringing into the country petroleum products, which terminate these activities by July 31 of the current year, shall be obligated to hold and maintain the accumulated stocks at least until July 31 of the following year. Where the activities of import and/or bringing into the country are terminated at a later time, stocks must be held and maintained for at least a year after the termination of these activities.
  61. During an emergency in the energy sector, enterprises under the obligation may terminate their activities only after they transfer the accumulated stocks to assigned state enterprises or other enterprises under the obligation. Stocks shall be transferred under an agreement. The agreement must provide for the conditions of stock transfer and for settlement for the transferred stocks.
  62. When an emergency in the energy sector has not been declared, the stocks accumulated by enterprises under the obligation that go bankrupt or terminate their activities, shall be transferred as prescribed by paragraph 34 of this Procedure or disposed of with the authorisation of the Ministry of Economy. VII. PURCHASING, RENEWAL AND REPLACEMENT OF STOCKS
  63. State-owned stocks shall be purchased, renewed or replaced by assigned enterprises. State-owned socks must be purchased, renewed or replaced in compliance with the requirements of legal acts. The Ministry of Economy shall have the right to lay down for assigned state enterprises a detailed procedure for the purchasing, sale and renewal of stocks.
  64. Other enterprises under the obligation, except for the assigned state enterprises, shall purchase, sell and renew stocks in accordance with commercial practice.
  65. During the entire stock renewal period, except in cases specified in paragraph 21 of this Procedure, enterprises under the obligation must hold their stocks at the level set for them. VIII. WRITE-OFF OF STOCKS
  66. Natural losses of petroleum products sustained in the course of accumulation and maintenance of state-owned stocks by enterprises under the obligation which do not exceed the approved rates of natural loss of fuel as well as losses sustained through sampling required for quality control laboratory tests may be written off in the manner prescribed by law.
  67. Losses of petroleum products sustained in the course of accumulation and maintenance of state-owned stocks by enterprises under the obligation, excess losses of petroleum products due to force majeure as well as the remainder of stocks unsuitable for use may be written off with the authorisation of the Minister of Economy. Assigned state enterprises shall be held financially liable for excess losses of state-owned stocks in the manner prescribed by law.
  68. Other enterprises under the obligation shall write off losses according to the procedure established by law. IX. STOCK RECORDS
  69. Stock records must be kept in accordance with the legal acts regulating stock record-keeping.
  70. Enterprises under the obligation must have documents relating to all stocks, wherever their storage site.
  71. The records must ensure the possibility to establish the amounts, composition and storage sites of stocks as well as their accumulation and maintenance costs. In the records, stocks must be kept separately from production/commercial stocks of enterprises.
  72. Enterprises under the obligation shall submit to the Ministry of Economy reports on the production, import, export, bringing into the country, taking out of the country, trade in, consumption, accumulation of stocks, maintenance and storage of crude oil, petroleum products and other fuel; the procedure for submitting the said reports and their scope shall be established by the Ministry of Economy and the Department of Statistics under the Government of the Republic of Lithuania. X. USE OF STOCKS
  73. Following the determination of annual petroleum products accumulation obligations and having discovered that the amount of stocks accumulated is above these obligations, enterprises may dispose of surplus stocks at their own discretion.
  74. A temporary decrease in the level of stocks (failure to accumulate the stocks) shall be permitted only provided that the stocks were used in the prescribed manner during an emergency in the energy sector or were lost due to force majeure circumstances.
  75. Stocks may be used only in an emergency in the energy sector. When an emergency in the energy sector is over, enterprises under the obligation must replenish the stocks to the required level. Upon assessing the amount of stocks used up, the Ministry of Economy shall set the time limits for their replenishment. XI. CONTROL OF STOCKS
  76. Accumulation and maintenance of stocks shall be controlled by the State Energy Inspectorate under the Ministry of Economy (hereinafter referred to as "the State Energy Inspectorate"), irrespective of their ownership, storage location or conditions. Officers of the State Energy Inspectorate shall have a right, within the limits of their competence, to enter, at any time, the territory and premises of an economic entity and inspect: 49.
  77. stock record documents relating to the accumulation and maintenance of stocks, in order to determine the amount of stocks accumulated; 49.
  78. record-keeping and computerised data relating to the stocks that are accumulated and maintained; 49.
  79. stock nomenclature and amounts; 49.
  80. stock renewal; 49.
  81. losses sustained and their write-off; 49.
  82. use of stocks; 49.
  83. replenishment of stocks; 49.
  84. technical condition of stock terminals and their suitability for holding stocks.
  85. The State Energy Inspectorate shall inspect enterprises under the obligation at least once per year.
  86. Upon completing the inspection, the State Energy Inspectorate shall draw up a report indicating all the shortcomings detected during the inspection and giving mandatory instructions. The State Energy Inspectorate shall notify the Ministry of Economy of the inspection results and present it with a copy of the report. The form of the report and the drawing up procedure shall be established by the State Energy Inspectorate.
  87. The quality of stocks at enterprises under the obligation shall be controlled by the State Non Food Product Inspectorate under the Ministry of Economy. Control shall be exercised concurrently with the inspection of stock accumulation and maintenance carried out at enterprises under the obligation by the State Energy Inspectorate. XII. FINAL PROVISIONS
  88. The enterprises obligated to accumulate stocks may conclude contracts for the accumulation and maintenance of stocks with other enterprises registered in the Republic of Lithuania which provide stock accumulation and maintenance services and satisfy the set requirements. Contracts for the accumulation and maintenance of stocks must specify the following: the amount, quality and price of petroleum products, the rights and duties of the parties, their responsibility, the duration of the contract and its termination conditions, the dispute settlement procedure, stock storage and record-keeping conditions complying with the requirements laid down in points 22, 23, 24, 25, 26, 27, 28, 29, 30, 42, 43 and 44 of this Procedure, as well as other conditions that are in conformity with laws and European Union legislation.
  89. Enterprises providing stock accumulation and maintenance services must have registered storage tanks with a total capacity of at least 21,000 cubic metres in their storage facilities.
  90. Enterprises under the obligation which have concluded contracts for the accumulation and maintenance of stocks with other enterprises registered in the Republic of Lithuania shall be responsible for the accumulation of stocks, the provision of information and the fulfilment of other requirements set in this Procedure. Where Lithuania has signed international agreements with other European Union states on the reciprocal storage of stocks of petroleum products, the enterprises obligated to accumulate stocks may also conclude contracts for the accumulation and maintenance of stocks with enterprises established in these states which provide stock accumulation and maintenance services.
  91. Sanctions shall be imposed in the manner prescribed by law for failure to accumulate stocks, for stock deficiency, inadequate stock accumulation, failure to provide information or provision of false information.

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