Dubai has implemented a comprehensive new regulatory framework for petroleum trading, aiming to enhance economic and environmental security. The Dubai Supreme Council of Energy will now oversee all aspects of the petroleum industry, from import and manufacturing to retail sales and storage. This resolution, recently announced, establishes strict authorization requirements and escalating penalties for non-compliance, impacting businesses operating within the emirate, including those in free zones.
The new regulations apply emirate-wide and cover gasoline, diesel, and other petroleum products. Existing operators have one year to comply with the new rules, with a possible one-year extension subject to approval by the Council’s Chairman. The move is expected to significantly reduce illegal activity and standardize practices across the sector.
Strengthened Oversight of Petroleum Trading in Dubai
The Dubai Supreme Council of Energy will assume broad authority over the petroleum industry. This includes setting rules for competition and market concentration, approving technical standards, and enforcing health, safety, and environmental regulations. The Council will also be responsible for issuing, renewing, and amending permits for all petroleum-related activities.
Key Responsibilities of the Supreme Council
Specifically, the Council will determine the number and location of fuel stations based on the Dubai Urban Plan. It will also approve standards for vehicles, facilities, and gas cylinders, ensuring safety through requirements like approved safety valves and seals. Furthermore, the Council will designate prohibited trading zones in coordination with other relevant authorities.
A core element of the new framework is the requirement for authorization before engaging in petroleum trading. According to the resolution, all entities must verify the source of their materials and provide proof of sourcing from companies approved by the Supreme Council. This aims to eliminate unverified and potentially illicit trade practices.
The regulations also mandate that businesses limit their activities to the scope of their authorization and register with the Ministry of Energy and Infrastructure’s Petroleum Trading Register. Any materials not meeting compliance standards can only be used for manufacturing or blending purposes. This focus on compliance extends to inter-emirate transport, retail fuel station setup, and import procedures.
Penalties for violating the new regulations are substantial and will increase in severity for repeated offenses. The Supreme Council has the authority to cancel permits, close facilities for up to six months, and revoke licenses. Non-compliant materials and vehicles are subject to seizure, destruction, or re-export, in accordance with existing laws, including Law No. (23) of 2015 regarding vehicle handling.
Violators will be required to rectify issues, repair any damage caused, and restore conditions to their original state at their own expense. Failure to meet these requirements within specified deadlines will result in intervention by the Council, along with the addition of 25 percent administrative costs, based on the Council’s assessment. Full cooperation from all entities is expected, and the Council retains the ability to delegate responsibilities through agreements as needed.
The implementation of this framework is intended to bolster Dubai’s economic resilience and protect its environment. The move aligns with global best practices in the energy sector and seeks to create a more transparent and regulated market. This is particularly important given Dubai’s role as a major regional hub for fuel supply and trade.
Additionally, the resolution aims to safeguard public health and property by reducing the risks associated with unregulated oil and gas activities. The new rules will supersede any existing regulations that conflict with the framework, ensuring a unified and consistent approach to petroleum trading. The Council’s previous inspections of diesel and LPG operations will continue to be recognized as part of the broader compliance effort.
The announcement comes as global energy markets face increased volatility and scrutiny. Governments worldwide are focusing on energy security and sustainability, and Dubai’s new regulations reflect this trend. The emphasis on verifying material sources and enforcing safety standards is consistent with international efforts to combat illegal fuel trafficking and ensure responsible energy practices.
The next step involves the official publication of the resolution in the Official Gazette, which will formally activate the new regulations. Stakeholders will be closely watching for further guidance from the Supreme Council of Energy regarding the implementation process and specific compliance requirements. The effectiveness of the framework in curbing illegal activity and promoting a more secure and sustainable petroleum industry will be a key indicator of its success.
While the one-year compliance period provides a reasonable timeframe for existing operators, the potential for extension is subject to the Chairman’s discretion. The long-term impact on market dynamics and the potential for increased costs associated with compliance remain to be seen. Continued monitoring of the sector and adaptation of the regulations based on real-world experience will be crucial to ensuring its continued relevance and effectiveness.
