Part of Oil Security Toolkit
IEA (2020), Czech Republic's legislation on oil security, IEA, Paris https://www.iea.org/articles/czech-republic-s-legislation-on-oil-security, License: CC BY 4.0
The Czech Republic’s legal oil emergency framework is governed by two acts. The first one is the Act No. 189/1999 on Emergency Stocks (ES) as the main legislation on oil emergency. The second one is the Act No 97/1993 on competence of the Administration of State Material Reserves (ASMR) which deals with the role of ASMR in the oil emergency system. Decree No 165/2013 concerns with the technical aspects of oil emergency stocks. All these documents reflect the Council Directive 2009/119/EC.
The Czech Republic is in the process of amendment to the relevant domestic legislation in accordance to the Commission implementing Directive (EU) 2018/1581.
The main planning document for oil emergency is the Standard plan – Major oil supply disruption. It sets activities, procedures and organisational measures carried out by ASMR, other central administrative bodies, the municipalities, and other entities in case of major oil supply disruption.
The Status and Rules of procedures of the Czech National Emergency Sharing Organisation (NESO) has been adopted as well.
According to article 1a(g) ES an oil ‘emergency situation’ exists whenever there is
a threat or a risk of a threat that the supply of crude oil or petroleum products may be disrupted in the Czech Republic or in other European Union Member States or in Member countries of the International Energy Agency (IEA).
A ‘state of oil emergency’ exists whenever there is a shortage of crude oil or petroleum products that results in the disruption of supply to the domestic market and whose detrimental consequences could not be alleviated without adopting measures pursuant to ES (article 1a(i) ES).
For the purposes of the ES, it is the Czech Government which declares a state of oil emergency by issuing a decree to that effect (article 4(1) ES). The chairman of the ASMR may propose to the government that an oil emergency shall be declared (article 4(3) ES. However, the chairman of the ASMR may decide to utilise emergency stocks without the consent of the government in response to an ‘international decision’ by the IEA or the EU even if the level of the emergency stocks falls below the minimum threshold (article 6(4) ES) as long as the internal market of the Czech Republic is left unaffected.
According to article 2(2) (and 9(1)(a)) ES, the Czech Republic’s Central Stockholding Entity is the ASMR. ASMR is the sole administrator of the Czech Republic’s emergency stocks (article 9(1)(a) ES), it creates and maintains emergency stocks (article 9(1)(b) ES), proposes measures to the government in case of a severe limitation of supply on the world oil market that could detrimentally affect the Czech Republic (article 9(1)(c) ES) and calculates the quantity of emergency stocks on an annual basis (article 9(1)(d) ES; cf. Annexes of Decree No 165/2013). The ASMR may enter into contracts with legal or natural persons to store emergency oil stocks on the ASMR’s behalf (article 3a ES).
The ASMR is obliged to store oil and petroleum products which should cover at least 90 days of the average daily net import of the reference year (article 2a ES). The ASMR could hold specific stocks (articles 2(4), 2a ES) as well in an amount corresponding to at least the 30-day average daily inland consumption of the previous year (article 2a(2) ES). If specific stocks are held, the ASMR must inform the European Commission about the quantity and composition of any specific stocks held (article 2a(7) ES).
Availability of stocks
Article 9(1)(i) ES provides that the ASMR adopts measures to ensure the physical availability of emergency stocks. However, the Czech legislative framework does not otherwise contain specific provisions governing the availability of emergency stocks.
Emergency stocks are stored in storage facilities (article 3(1) ES) which are surrounded by protection zones (article 3(3) ES) in which it is forbidden to engage in activities which could threaten the safe operation of a storage facility (article 3(4) ES). Further details concerning the exact storage modalities are supplied by article 5 of the Decree No 165/2013.
Emergency oil stocks may in principle be used only in times of oil emergency as determined by the Czech Government (article 6(1) ES). The ASMR’s chairman shall prepare and submit to the Government a plan for the use of emergency oil stocks (article 6(3) ES) in times of emergency (article 9(1)(g) ES). However, article 6(4) ES suggests that ES measures may also be utilised in response to an ‘international decision’ (by the IEA or the EU). When no oil emergency has been declared, emergency oil stocks may be utilised as the chairman of the ASMR sees fit for as long as the minimum level of emergency oil stocks is preserved (article 6(6) ES).
In times of emergency, emergency oil stocks may be released in the form of sale, loan, or transfer of jurisdiction of management (article 6(2) ES).
According to article 5 ES, the Czech government is authorised to limit the consumption of crude oil and petroleum products by limiting the maximum speed of vehicles (article 5(1)(a) EOSA), the use of some types or categories of vehicles on specific days or for specific kinds of transport (article 5(1)(b) ES), by limiting or prohibiting the use of some groups of motor vehicles with even or odd final license plate numbers on certain days (article 5(1)(c) ES), by limiting the use of railway vehicles (article 5(1)(d) ES), limiting aviation related activities (article 5(1)(e) ES), limiting or banning the sale of fuel (article 5(1)(f) ES), regulate the import of crude oil or petroleum products (article 5(1)(g) ES), by introducing a rationing system (article 5(1)(h) ES) or by limiting or banning the export of oil or petroleum products (article 5(1)(i) ES). In deciding how and when to implement demand restraint measures, the Czech government is assisted by proposals of the ASMR (article 9(1)(k) ES). The implementation of these demand restraint measures shall be facilitated by regional authorities and officials of municipalities (article 5(4) ES).
Demand restraint measures adopted based on article 5(1) ES may be adopted only to the extent that the national defence of the Czech Republic is not compromised (article 5(3) ES).
The Czech Republic’s emergency regime is monitored and enforced on the domestic, regional and international level.
The ASMR is obliged to submit to the Czech Ministry of Industry and Trade,
to the European Commission and to the IEA a statistical overview of the status of the Czech Republic’s oil and petroleum products stocks (article 9(1)(e) ES; cf. article 6 Decree No 165/2013).
Moreover, if there is a threat or an actual oil emergency, importers, processors, operators of storage facilities, custodians holding oil stocks on behalf of the ASMR, and distributors of crude oil and petroleum products are required to forward to the ASMR information about their imports, exports, and stocks of crude oil (article 7 ES).
The ASMR is obliged to immediately inform the European Commission, the IEA and the Ministry of Industry and Trade about any potential or real decrease of oil emergency stocks below the compulsory level, with stating the reasons of such decrease and measures which shroud be taken to replenish the stocks (article 9 (1) (f) ES).
Violations of the protection zones (article 3(4) ES) surrounding emergency stock storage facilities can lead to the imposition of fines up to CZK 100 000 (article 10(2) ES). Violations of the ES’s demand restraint measures can lead to fines up to CZK 5000 (article 10(2) ES). Administrative offenses by legal or natural persons engaged in business activities can lead to the imposition of fines between CZK 1 000 000 up to CZK 20 000 000 (article 10a(2) ES). The implementation of these enforcement measures is undertaken by various executive agencies (article 10b ES).
As a Member State of the European Union, Council Directive 2009/119/EC obliges the Czech Republic to maintain a minimum volume of emergency oil stocks corresponding to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. The Directive also imposes strict requirements concerning the composition and location of the emergency oil stocks, so as to guarantee their availability and accessibility in case of need, among other provisions.
The Czech Republic’s compliance with the provisions of the directive is monitored and enforced by the European Commission. If a Member State is deemed not to be compliant with the EU Directive, the Commission might decide to initiate an infringement procedure, which might ultimately lead to refer the case to the Court of Justice of the European Union (articles 258-259, Treaty on the Functioning of the European Union).
As a Member of the IEA, the Czech Republic is obliged, pursuant to article 2 of the International Energy Programme (IEP), to maintain oil reserves equal to 90 days of net imports of the previous year. IEA Members are obliged to submit information concerning their emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP.