New decree on liquefied petroleum gas

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Question: What are the outstanding regulations of Decree 19/2016/ND-CP?

Answer:

The new decree stipulates the following outstanding regulations:

Tightening the gas business conditions

Decree 19 further governs two other types of gas as liquefied natural gas (LNG) and compressed natural gas (CNG).

Accordingly, Decree 19 adds the following conditions for merchants as gas importers/exporters:

Having the quay under the Vietnamese seaport system owned or co-owned under a joint venture contract, for example, or having the quay lease contract with a term of 5 years at least (reduced to only 1 year in accordance with the current law);

Having a total storage capacity of at least 60,000m3 in tanks for LNG, and 200,000m3 for CNG (still 60,000m3 as for LPG in accordance with the current law);

Especially for LPG, the importer/exporter merchant needs to have an adequate quantity of LPG bottles of various types (excluding LPG mini-bottles), and is eligible for market entry with a minimum total capacity of 3,930,000 liters and operating a LPG distribution system. After two years from the date of issuing the certificate for LPG import/export eligibility, such merchant shall have the LPG filling station under his ownership.

Decree 19 regulates a series of compulsory conditions for the other gas merchants with respect to producing, processing, distributing, repairing, acting as a general agent.

Certificate for gas business eligibility

Decree 19 details the procedures for issuing the certificate for gas business eligibility and the merchant’s rights and obligations in each gas business type. Accordingly, within 30 business day of receiving the appropriate and sufficient submission, the competent state authority has the responsibility to consider, assess and issue the certificate for gas business eligibility to the merchant. The certificate must be used within 5 years of its issuance.

Merchants who were granted an indefinite term certificate before the effective date of the Decree, they are eligible to continue operating for one more year from the effective date of the Decree and afterwards must fully comply with the Decree.

LPG filling stations that were granted an eligibility certificate are eligible to continue operating for two more years from the effective date of the Decree. After this term, the LPG filling station must satisfy the conditions to belong to a lead LPG merchant.

The Decree 19 took effect as from May 15, 2015.