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The regulation, guidance, supervision, and auditing of petroleum markets are carried out under the provisions of the Petroleum Market Law No. 5015 ("Law") and related legislation. In regulating and operating the petroleum market, the Ministry of Energy and Natural Resources, the Energy Market Regulatory Authority ("EPDK"), and the Energy Market Regulatory Board ("Board") play active roles.
Real or legal persons wishing to operate in the petroleum market must obtain the licenses enumerated in the Law, which are granted by EPDK. Technology, quality, safety, service, and the sustainability of the enterprise are key factors considered when granting licenses.
1. Refinery License
The Law defines a refiner as a capital company authorized to carry out refining activities under its license and to trade in petroleum.
With a refinery license, it is possible to import crude oil and fuel oil, trade crude oil domestically, and make bunker fuel deliveries. Subject to being specified in the license, refineries may also process, store, and transport via pipelines within or near their facilities and carry out fuel distribution activities through a distribution company they own.
2. Distribution License
A distributor is defined under the Law as a capital company authorized to distribute fuel oil and, if specified in its license, to perform storage, transportation, bunker delivery, and lubricant production.
A distribution license allows the holder to import crude oil and fuel oil, distribute products defined as fuel oil, supply fuel to stations owned or contractually affiliated with them, sell fuel wholesale to free users, and transport via pipelines to facilities near storage plants. However, distribution to other distributors' dealers is prohibited.
3. Dealer License
A dealer license authorizes natural or legal persons to supply fuel to end users under a feasibility-backed agreement with a licensed distribution company.
The Board may categorize dealership licenses according to technical and economic criteria.
4. Transportation License
A transportation license is mandatory for the transportation of crude oil and fuel oil by sea and rail vehicles under cabotage.
5. Processing License
Activities that produce new products from petroleum and other chemical substances—excluding lubricant production—or that change the quality or quantity of products, may be performed under a processing license.
6. Storage License
The storage of petroleum owned by others to meet the stock and operational needs of market participants is carried out under a storage license.
7. Transmission License
The transportation of petroleum via pipelines is conducted by capital companies holding a transmission license. Pipelines connecting producers to refineries or transmission networks and internal facility pipelines are excluded from this license scope.
8. Lubricant Production License
A lubricant production license must be obtained by natural or legal persons who produce natural or synthetic substances that, when additives are mixed into base oil or chemically processed materials, reduce friction and/or wear or provide cooling between moving and contacting surfaces.
9. Free User License
A free user is a licensed consumer of petroleum products such as heating oil, fuel oil, and diesel with an annual consumption exceeding the amount determined by EPDK for each product (not less than 5,000 tons per year). The procedures and principles regarding the determination and licensing of free users are set forth by regulation.
10. Bunker Delivery License
Bunker delivery may be carried out under a refinery or distribution license, as well as a bunker delivery license. Licensed capital companies and their licensed dealers can supply bunker fuel, obtained domestically or internationally, to marine and air vessels under this license.
The evaluation criteria, technical, and financial requirements for the granting of transportation, processing, storage, transmission, lubricant production, free user, bunker delivery company, and bunker dealer licenses are determined by EPDK.
The Law provides that conducting activities requiring a refinery, distribution, transportation, bunker, processing, storage, transmission, lubricant production, or free user license without holding such a license shall result in an administrative fine of no less than 2,000,000 TRY and no more than 10,000,000 TRY, corresponding to 0.014% of the net sales revenue derived from the relevant petroleum market activity in the preceding year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
