The Ministry of Energy adopts a list of supply system violations and penalties of 20 million
The Saudi Ministry of Energy announced the adoption of the "Regulations for Controlling Violations and Imposing Penalties," in addition to the "Schedule of Violations of the Provisions of the Energy Supply System," in a decisive regulatory step aimed at governing the energy sector and ensuring its sustainability. This decision strengthens the regulatory framework and ensures full compliance with the provisions of the system, thus contributing to increased efficiency and security of energy supplies across the Kingdom.
Classification of violations and deterrent penalties
According to the new regulations, violations are classified into two main categories to ensure proportionality between the violation and the penalty. The first category is "serious violations ," which pose a direct and significant threat to the environment, public health, or the safety of vital facilities. The second category is "non-serious violations." The regulations stipulate escalating fines based on the size of the establishment (micro, small, medium, large) and its geographical scope, with the maximum penalty for large establishments reaching 20 million Saudi riyals .
Serious violations that warrant these severe penalties include: disposing of assets without obtaining the ministry’s approval, providing misleading information or incorrect data, obstructing the work of inspectors or preventing them from performing their duties, and ceasing to conduct business without prior approval.
Smart control and monitoring mechanisms
The regulations grant the relevant department within the Ministry of Energy broad powers to regulate the market, including conducting regular and surprise inspections by licensed inspectors. The use of modern documentation technologies, such as photography and photogrammetry, has also been adopted to ensure the accurate detection of violations. The regulations empower inspectors to investigate reports and take immediate action on suspected cases, with all data documented in official reports.
Business rights and the principle of compliance
Despite the severity of the penalties, the regulations emphasize the principles of transparency and compliance. Establishments are notified of violations and given a corrective period (usually 30 days) to rectify the situation before the final penalty is imposed. The regulations also guarantee establishments the right to appeal to the Minister or their designee within 60 days of being notified of the decision, thus ensuring fairness and protecting the rights of all parties.
The context of Vision 2030 and energy sustainability
This regulatory move comes within the framework of Saudi Arabia's efforts to achieve the goals of Vision 2030 , which prioritizes energy efficiency and the sustainability of hydrocarbon resources. These regulations aim to maximize the utilization of natural resources and minimize waste, in line with Saudi Arabia's green initiatives and the principles of a circular carbon economy.
Economic and regulatory impact
The implementation of this regulation is expected to contribute to creating a fair and competitive investment environment in the energy sector. By establishing clear accountability frameworks, compliant investors are protected from unfair competition with violators, the reliability of national supply chains is enhanced, and more foreign and domestic investments seeking a stable and well-defined regulatory environment are attracted.
