List of energy supply violations: fines of 20 million riyals and details of penalties
In a significant regulatory step aimed at governing the energy sector and enhancing transparency, the Ministry of Energy a detailed regulation for addressing violations and imposing penalties, in addition to a "Schedule of Violations of the Energy Supply System." This step comes within the framework of the Kingdom's ongoing efforts to develop the legislative environment for the energy sector, ensuring the optimal utilization of natural resources and the protection of critical infrastructure.
Regulatory context to promote energy sustainability
The issuance of this regulation aligns with the objectives of the Kingdom's Vision 2030, which prioritizes energy efficiency and the sustainability of supplies. Through these stringent measures, the Ministry aims to eliminate irregular practices that could harm the national economy or pose a risk to public safety and the environment. This regulation serves as a legal instrument to ensure that all establishments operating in the sector adhere to technical and safety standards, thereby enhancing the reliability of supply chains and protecting the rights of compliant investors.
Details of fines and classification of violations
The new regulations stipulate a precise classification of violations, divided into two main categories, with deterrent financial penalties commensurate with the size of the establishment and the severity of the damage:
1. Serious violations: fines up to 20 million riyals
This category pertains to violations that pose a direct threat to the environment, public health, or the safety of facilities. Fines are categorized based on the size of the facility (large, medium, small), ranging from 10,000 riyals to a maximum of 20 million riyals for large facilities in cases of serious violations. These violations include:
- Disposing of energy allocation documents or licenses to third parties without the Ministry's approval.
- Engaging in natural gas and its liquids activities without obtaining the necessary licenses.
- Providing misleading or incorrect information to regulatory authorities.
- Negligence leading to serious incidents such as fires, deaths, or environmental leaks.
- Obstructing the work of inspectors or preventing them from performing their supervisory duties.
2. Minor violations: regulatory procedures
This category focuses on operational and procedural aspects that do not cause direct harm but disrupt public order, such as:
- Failure to maintain assets or delivery in a dilapidated condition.
- Delay in submitting periodic reports or operational data.
- Commencing commercial operation without prior authorization.
- Failure to comply with the scope of the license or using energy for purposes other than those for which it was intended.
Control mechanisms and the right to appeal
To ensure fairness, the regulations grant oversight teams broad powers, including the use of modern technologies for documenting and recording violations. Conversely, the system guarantees establishments the right to defend their interests, granting a corrective grace period (usually 30 days) to rectify the violation before a final penalty is imposed. The system also allows those affected to appeal to the Minister or their designee within 60 days of being notified of the decision, thus striking a balance between strict oversight and safeguarding investors' rights.
