Arabic
Issued by Royal Decree D/139
Article 1
The following words and phrases—wherever they occur in the law—have the meanings assigned to each of them, unless the context requires otherwise:
Law: The Law of Petroleum and Petrochemical Materials.
Regulations: The executive regulations of the law.
Ministry: The Ministry of Energy.
Minister: The Minister of Energy.
Person: Every natural or legal person.
Petroleum materials: Oils, bitumen, condensates, and products derived from them through refining, production, processing, and cracking operations, as well as petroleum materials resulting from distillation, manufacturing, maintenance, operation, or cleaning processes. Petroleum materials include all types of liquid fuel, whether used or consumed.
Petroleum operations: The use, sale, purchase, transport, storage, import, export, filling, or processing of any petroleum material. Petroleum operations include building and operating a refinery, terminal, or distribution station.
Petrochemical materials: Chemical compounds that use a hydrocarbon, petroleum, or other petrochemical material as a basic feedstock in their production, through separation, blending, or chemical reaction processes. Petrochemical materials are referred to as: Basic, intermediate, conversion, and specialty materials.
Petrochemical operations: The production, processing, sale, purchase, distribution, transport, storage, filling, packaging, import, or export of petrochemical materials. Petrochemical operations include operating petrochemical facilities.
Feedstock: The use of one or more petroleum or petrochemical materials as an input in any production process, through refining, blending, or chemical reactions.
Refinery: A facility that refines crude oil or condensates to produce petroleum materials by separation and processing.
Terminal: A designated site in seaports for the export, import, or local distribution of petroleum materials.
Distribution station: A site for the local distribution of petroleum materials.
Processing: The process of improving, purifying, or making fit-for-purpose used petroleum or petrochemical materials, petroleum or petrochemical materials returned from refineries and facilities, wastes containing petroleum or petrochemical materials, spent catalysts, or oil residues.
Filling: The process of filling a type of petroleum material into containers designed for this, for the purpose of trading it.
License: A document granted by the ministry, authorising a licensee to practice petroleum or petrochemical operations.
Licensee: Every person who holds a license.
Priced petroleum products: Petroleum products whose domestic selling price has been set by the government.
Article 2
The law aims to:
1․ Regulate petroleum and petrochemical operations, in a manner that ensures the realisation of the public interest and the protection of the rights and interests of consumers and licensees.
2․ Develop the contribution of the private sector in the field of petroleum and petrochemical operations and create a competitive environment, in a manner that achieves economic growth, contributes to the gross domestic product, and raises energy-consumption efficiency levels.
3․ Promote the circular carbon economy and manage greenhouse gases.
4․ Develop ways of utilising petroleum and petrochemical materials, and maximizing the benefit of raw materials and transferring them to advanced stages of production.
5․ Ensuring compliance by the petroleum and petrochemical materials sector with national strategies and plans, as well as laws and regulations, environmental criteria and standards, and security and safety rules.
6․ Ensuring the security and reliability of petroleum and petrochemical material supplies.
7․ Monitoring and supervising petroleum and petrochemical operations to enhance compliance with the provisions of the law and prevent illegal practices.
Article 3
The provisions of the law apply to petroleum and petrochemical operations and matters relating to them. The activities subject to the Dry Gas and Liquefied Petroleum Gas Distribution Law for Residential and Commercial Purposes are not covered, nor are industrial applications that use petrochemical materials as a primary or additional component to produce fully manufactured or semi-manufactured consumer products, or to convert semi-manufactured products into fully manufactured products that are produced by forming, blending, assembling, composing, reforming, filling, or packaging, and where some or most of their production processes use machinery.
Article 4
The regulations must specify the following:
1․ Provisions on technical, operational, and procedural rules necessary for practising petroleum and petrochemical operations.
2․ Requirements for issuing licenses, including the scope of activity, the duration of the license, the requirements that the licensee must comply with, and the provisions for amending, renewing, and transferring them.
3․ Criteria for assessing compliance with the license and the consequences of non-compliance.
4․ Qualification and performance standards and requirements for petroleum and petrochemical operations.
5․ Standards for classifying materials containing petroleum materials.
6․ Rules and procedures that contribute to ensuring the security and reliability of petroleum and petrochemical materials supplies, and securing the needs of the local market.
Article 5
1․ A person shall not practice any petroleum or petrochemical operations except after obtaining a license.
2․ Prior approval from the ministry must be obtained before issuing any licenses or approvals necessary to establish any petrochemical facility.
Article 6
1․ A fee—which must be deposited into the public treasury of the state—must be collected to issue and renew licenses.
2․ A portion of the fee to the ministry must be deducted to be spent on developing the petroleum and petrochemical operations sector.
Article 7
The ministry may reject an application to issue or renew an export license for whoever has been found to have violated the provisions of the law and regulations by a decision of the committee stipulated in article 18 of the law, or who has been previously convicted of committing the crime of customs smuggling of petroleum or petrochemical materials or attempting to do so, unless a period of not less than (five) years has lapsed since the decision proving the violation or conviction. The competent entity shall provide the ministry with the names of those convicted of the crime of customs smuggling petroleum or petrochemical materials.
Article 8
A licensee shall notify the ministry upon the occurrence of any situation or incident that is expected to lead to the total or partial cessation, permanently or temporarily, of the licensed operations, as determined by the regulations.
Article 9
1․ Without prejudice to the competence of the Saudi Standards, Metrology and Quality Organization, the ministry shall adopt the mandatory specifications and standards for petroleum and petrochemical materials, and shall adopt the methods of their testing.
2․ A licensee shall, when practicing petroleum or petrochemical operations, comply with the adopted specifications and standards.
Article 10
A licensee shall provide the ministry, upon its request, with any documents or papers related to his licensed business, and shall provide the ministry with periodic reports, in accordance with the provisions specified in the regulations.
Article 11
Petroleum material must be purchased and sold at the global price if it is to be used as feedstock in production.
Article 12
1. Inspectors—identified by a decision issued by the minister—jointly or individually shall carry out works of monitoring, inspection, and policing violations of the provisions of the law and regulations, as well as investigating them.
2․ Inspectors may enter facilities, storage, and sites used for the practice of petroleum and petrochemical operations, for the purposes of monitoring, inspection, and policing violations. For this purpose, they may document by visual recordings; hear statements; take testimonies; view documents, records, paper and electronic data related to the violation and keep copies of them; and take samples of materials suspected of being petroleum or petrochemical materials if necessary.
3․ The inspectors may seize anything suspected of being used in violation of the provisions of the law, regulations, and license conditions, and this must be at the expense of the facility whenever the violation is proven, provided that a report is prepared explaining the obtained items and their descriptions during the seizure, along with a statement of the reason for the seizure and its duration, and it must be referred to the committee stipulated in article 18 of the law to decide whether to continue the seizure or cancel it, as specified by the regulations.
4․ The ministry may coordinate with any public or private entity it sees fit to seek assistance from—when necessary—in order to carry out the tasks of monitoring, inspection, and policing.
Article 13
Any person who engages in or participates in, through agreement or assistance, carrying out any of the following acts is considered in violation of the provisions of the law:
1․ Providing the ministry or the public with false or misleading information or data related to petroleum or petrochemical operations or materials.
2․ Obstructing or hindering inspectors from performing their duties stipulated in the law and regulations.
3․ Carrying out or attempting any actions that lead to manipulating storage levels for the purpose of liquefying or selling it, or disrupting the security and reliability of petroleum and petrochemical supplies.
4․ Breaching any of the provisions of the law, regulations, or license conditions.
Article 14
1․ Without prejudice to the provisions of article 15 of the law or any punishment more severe stipulated by another law, whoever violates the provisions of the law, regulations, or license conditions must be punished with one or more of the following punishments:
(a) Suspension of the license for a period not exceeding ten years.
(b) Cancellation of the license.
(c) A fine not exceeding 30,000,000 (thirty million) Riyal or an amount not exceeding twice the value of the petroleum material subject of the violation at the global price at the time of its seizure, whichever is higher.
(d) A fine not exceeding 5,000 (five thousand) Riyal for each day the violation continues, provided that this fine is calculated starting from the date specified in the decision issued regarding the violation.
2. When imposing the fine referred to in this article, distinguishing between the principal and the accomplice, the completed violation and attempting it, the nature of the activity and the violation committed, its gravity, the amounts obtained from the violation, the damages resulting from it, and the aggravating and mitigating circumstances must be taken into account.
3․ It is permitted to include in the decision—issued to determine the punishment—a stipulation that a summary of it must be published at the expense of the violator in a local newspaper or in any other means determined by the committee stipulated in article 18 of the law, according to the type of violation committed, its gravity, and its impact, provided that the decision is published after it has acquired the status of finality.
Article 15
1․ Without prejudice to any punishment stipulated in another law, whoever exports a priced petroleum material or a material containing a priced petroleum material outside the Kingdom without a license or attempts to do so, must be punished with one or more of the following punishments:
(a) Imprisonment for a period not exceeding five years.
(b) A fine not exceeding 30,000,000 (thirty million) Riyal or an amount not exceeding twice the value of the petroleum material subject of the crime at the global price at the time of its seizure, whichever is higher.
(c) Confiscation of the seized items subject of the crime.
2․ When assessing the punishment, the circumstances of committing the crime and the price difference between the global price and the price of the material subject of the crime at the time of its seizure must be taken into account.
3․ The Public Prosecution—in accordance with its jurisdiction —shall carry out the investigation and prosecution before the competent entity in the crime referred to in paragraph 1 of this article.
Article 16
1․ Without prejudice to articles 13 and 14, the minister shall issue—by his decision—a schedule classifying violations subject to immediate punishments, provided that the fine for a single violation does not exceed 10,000 (ten thousand) Riyal.
2․ The schedule—referred to in paragraph 1 of this article—must specify the type of each violation accompanied by the punishment specified for it, and the ministry shall impose that punishment in accordance with the procedures stipulated in the regulations, provided that those procedures include the presence of a prior warning before imposing the punishment and specifies the correction periods.
Article 17
1. If the ministry finds that a person has violated any of the provisions of the law, regulations, or license conditions, the ministry may, in urgent and necessary cases—by a decision issued by the minister—take one or more of the following measures:
(a) Compelling him to stop continuing the violation.
(b) Compelling him to rectify the situation and take the necessary corrective measures under the supervision of the ministry to address the results of the violation. If he delays this, the ministry may do so at his expense.
(c) Suspending the licensed activity, partially or completely, for a period not exceeding six months.
(d) Destroying materials which are proven—pursuant to laboratory reports—to be harmful or unfit for use, and the violator shall bear the costs of the destruction process.
(e) Take the necessary measures to temporarily manage any of the licensed business for a specific period not exceeding six months renewable for one time, in a manner that ensures the continuity of that activity, in accordance with the rules and procedures specified in the regulations.
2․ The decision—referred to in paragraph 1 of this article—must be enforced from the date the violator is notified of it, provided that the ministry refers the violation within a period not exceeding ten business days to the committee stipulated in article 18 of the law to consider it. The committee shall issue a decision in this regard within a period not exceeding twenty business days. If the committee does not decide within this period or if the party concerned does not accept its decision, he may object before the competent court in accordance with the legal procedures followed in this regard.
Article 18
1․ A committee—or more—must be formed by a decision by the minister from specialists where the number of its members must not be less than three, and in which chairman of the committee must be identified, provided that he is a law specialist, and its membership must include a specialist or expert in the activities subject to the law. The decision must stipulate one or more reserve members. The committee must be reformed every three years, and it is permitted to renew its membership.
2․ The minister shall issue a decision specifying the rules and procedures of the work of the committee, and shall specify the remuneration of its members and its secretariat.
3․ Without prejudice to the provisions of article 15 and article 16(2) of the law, the committee referred to in paragraph 1 of this article shall consider violations of the provisions of the law, regulations, or license conditions and impose the punishments stipulated in article 14 of the law.
4․ The decisions of the committee must be issued by majority and must be reasoned, and a grievance may be filed against any of them before the competent court within thirty days from the date of knowledge of the decision. Knowledge of the decision is achieved by notifying the party concerned of it by any means of judicial notification.
Article 19
The minister—or whoever he authorises—may grant—in accordance with the controls and conditions agreed upon with the Ministry of Finance—whoever helps in uncovering any violation of the provisions of the law, regulations, or license conditions a financial reward not exceeding 20% of the amount of the fine collected from the violation, provided that he is not an employee of the ministry or one of those whom assistance is sought from in accordance with article 12(4) of the law to police violations or perform monitoring or inspection tasks.
Article 20
The minister shall issue the regulations within ninety days from the date of publication of the law in the official gazette, and they enter into force from the date the law enters into force.
Article 21
The law replaces the Petroleum Products Trading Law issued by Royal Decree D/18 dated 28 Muharram 1439 [18 October 2017], and repeals all provisions conflicting with it.
Article 22
The law enters into force after ninety days from the date of its publication in the official gazette.
Published in Umm Al-Qura 5066 issued on 24 January 2025.
