Energy Ministry issues implementing regulations of dry gas, LPG distribution law

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Saudi Arabia’s Ministry of Energy announced today, May 4, the issuance of the implementing regulations and service provision guide for the law on the distribution of dry gas and liquified petroleum gas (LPG) for residential and commercial purposes.

The regulations classify the law activities and licenses, including the transportation of LPG from its sources to LPG facilities or an independent gas distribution network, the Saudi Press Agency (SPA) reported, citing a ministry statement.

This is in addition to regulating the establishment, development, operation or maintenance of LPG filling and storage facilities, the wholesale distribution of LPG, and the retail sale of LPG cylinders.

The regulations also covered the conditions for granting licenses, which will be offered for bidding by inviting a number of those who meet such conditions.

The move came within the framework of the ministry’s endeavor to achieve the objectives of the dry gas and LPG distribution law for residential and commercial purposes, seeking to encourage competition, upgrading the services level, achieving supply security, enhancing the licensees’ efficiency and raising the level of standards applied in this vital service.

Furthermore, the regulations target ocalizing technology and protecting the interests of beneficiaries. This is by activating the law’s service provision guide, which defines the obligations of licensees, consumer rights and complaints handling policy.

By adopting and activating the implementing regulations and service provision guide, the ministry aims to encourage investment in various LPG distribution activities. This is in order to ensure the achievement of the public interest and the development goals of the Kingdom, via creating a competitive environment that accomplishes a feasible economic return, contributing to the Kingdom's Vision 2030 goals.

The law’s implementing regulations stipulates that the ministry may periodically review the gas tariff charged by the licensee from consumers of gas services, besides monitoring compliance with the approved tariff.

A commercial consumer has been defined by the ministry as any person whose commercial facility is supplied with dry gas, LPG, LPG gas cylinders or alternative natural gas for commercial purposes. Any government or industrial facility consuming not more than 70,000 liters per day or its equivalent is considered a commercial consumer.

The Saudi Cabinet approved, in June 2022, the amendments to law of dry gas and LPG distribution for residential and commercial purposes, according to data compiled by Argaam.