June 2021 - The Turkish Energy Market Regulatory Authority ("EMRA") has recently amended several pieces of secondary legislation related to Turkey's petroleum and liquefied petroleum gas markets (the "Amendments").

In general, the aim of the Amendments is to reflect changes made in May this year to the Petroleum Market Law and the Law on Liquefied Petroleum Gas (you can find our take on these amendments here). Nevertheless, the Amendments have also introduced certain new provisions, which are summarised below.

Changes introduced by the Amendments

  • Amendments related to the petroleum market

    Prior to the Amendments, paragraph 2, Article 17 of the Petroleum Markets License Regulation imposed on petroleum distribution license owners a sale requirement of 60,000 tons of fuel and diesel oil and sanctions in the event of failure to abide by this requirement.

    Under the amended provision, distribution license owners are obliged to sell a minimum of 20,000 tons of fuel and diesel oil in the second calendar year following the year that they obtained their license, 30,000 tons in the third year, 40,000 tons in the fourth year and 60,000 tons in the fifth year. Failure to do so will result in license cancellation. However, if the failure is 10% or less below the required amount, the license will not be cancelled in the concerned year; repetition of the failure in the following year, however, results in license cancellation. Sales made as a result of the trade with the distributors and the fuel oil exporters remain outside the scope of the Amendments and are therefore not taken into account in the calculation of the concerned amounts, same as before.

    The Amendments also provide that current distribution licenses will be considered as newly issued licenses for the purpose of the application of Paragraph 2, Article 17 of the Petroleum Markets License Regulation.

    An amendment to the Petroleum Markets License Regulation relating to income share payments has also been introduced by the Amendments. According to the concerned amendment, license applications, applications for the extension of a license term, amendments to a license, and national market supply request made by license owners with an income share debt relating to previous terms will be deemed as not having been made if such debt is not paid within 10 days from EMRA's notification for payment.

  • Amendments related to liquefied petroleum gas market

    Prior to the Amendments, the Liquefied Petroleum Gas (LPG) Market License Regulation required all license owners to apply for an amendment to their licenses within 60 days following the occurrence of an event requiring a license amendment. The Amendments have shortened this time period for LPG auto-gas dealership license holders, which will be obliged to make such applications within 30 days if the amendment is for a change to their LPG distribution company.

    Similarly, the term provided to LPG auto-gas dealership license holders to amend their licenses (in cases where their LGP distribution company's license has been cancelled or has expired or they failed to renew their contract with the LGP distribution company and did not execute a new contract with a new LGP distribution company after two months - which is also amended as 30 days with the Amendment - their previous contract term expired) has been reduced from two months to 30 days.

Conclusion

The Turkish state and EMRA have made several regulative changes regarding the petroleum and liquefied petroleum gas markets in the past four mounts. First, a ceiling price for fuel and diesel oil was implemented for two months, followed by amendments to the Petroleum Market Law and the Law on Liquefied Petroleum Gas. The Amendments have implemented further regulative changes, although the main purpose of the Amendments was to implement changes to the Petroleum Market Law and the Law on Liquefied Petroleum Gas. Therefore, the Amendment may be seen as another step in the recent tendency of the state and EMRA to regulate the petroleum and liquefied petroleum gas markets in Turkey more strictly.

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