Poland's legislation on oil security
Part of Oil Security Toolkit
Introduction
The Polish oil emergency response regime is governed primarily by the provisions of the Polish 2007 Oil Stockholding Act (OSAC).
Relevant European Unit legislation
Other related links
Circumstances triggering operation of the emergency response system
The provisions of the Polish oil emergency regime are triggered either by threats to the fuel security of the state (article 32(1)(1) OSAC) or if the compliance with Poland’s international obligations requires the taking of emergency measures (article 32(1)(2) OSAC).
Authority determining whether emergency exists
According to article 33(1) OSAC, it is the minister responsible for energy who determines whether the conditions triggering the Polish emergency response system have been met and who subsequently decrees to use all or parts of the emergency stocks in order to alleviate the crisis. The minister responsible for energy assesses the situation on his own initiative or on the motion of local authorities (known as voivodes), oil companies or an eligible entity (of particular importance for protection of life, health, security, or running of economy).
In certain circumstances, the minister responsible for energy may transfer part of agency stocks in the amount corresponding to no more than 4 days of net imports to strategic reserves referred to in the Strategic Reserve Act (article 48a(1) OSAC). In that case, the release of strategic reserves may also be requested by the minister of national defence, the minister for internal affairs, the minister for agriculture, the minister of justice, the minister for transport, the minister for health or other public agencies working in the field of state security and defence or crisis management (article 18(2) SRA). Requests from these departments are subject to the authorisation by the minister responsible for energy (article 18(5) SRA).
Legal stockholding obligations
General
According to article 3(2) OSAC, there are two categories of emergency stocks: stocks of crude oil or fuels created and maintained by producers and traders (article 3(2)(1) OSAC) and stocks created and maintained by the Material Reserves Agency (ARM) of Poland (article 3(2)(2) OSAC). According to article 2(18) OSAC, a producer is an entrepreneur who conducts business activities in the area of fuel production including leasing to other entities such production.
According to article 2(19) OSAC, a trader is either an entity that conducts on his own or through another entity business activities related to the import of crude oil or fuels (article 2(19)(a) OSAC), or a natural person, a legal person and an unincorporated entity, which, without conducting business activity related to the import of crude oil or fuels, independently or through another entity, performs activities related to the import of crude oil or fuels and consumes them for its own purposes (article 2(19)(b) OSAC).
The exact list of products imports or production of which are covered by emergency stocks obligation and products which are held in emergency stocks is determined by the minister in charge of energy (article 3(5) OSAC, see also article 4 OSAC) in an ordinance.
Storage Agency
Poland’s central stockholding entity is the ARM (article 26 SRA) which is subject to the supervision of the minister responsible for energy (article 26(5) SRA). The ARM supervises mandatory stocks held by producers and traders and creates and maintains agency stocks (articles 13, 21a, 22 OSAC). It is financed by the Intervention Stocks' Fund mainly through contributions from producers and traders (articles 21b, 28a, 28b, 28c OSAC).
Storage Quantity
According to article 3(3) OSAC, the volumes of stored emergency stocks must correspond to at least the volume of 90 days of average daily net imports in the previous year. At present, Polish producers and traders must stock emergency stocks corresponding in volume to 53 days of average daily production or import in the previous year (article 5(3)(6) OSAC). All remaining stocks are created and maintained by ARM (article 21a(1) OSAC).
Availability of stocks
According to article 3(12) OSAC, intervention stocks shall be maintained in storage facilities whose technical parameters (together with the transmission and transport systems linked to those facilities) ensure the release of all intervention stocks held in that facility within a period of 90 days (physical availability). However a transition period has been granted for extraction of crude oil from caverns: 150 days since 1 January 2018 and 90 days since 1 January 2024 (article 3(13) OSAC).
Storage Locations
According to article 9(1) OSAC, Polish emergency stocks may be located only on Polish territory. However, in exceptional circumstances stocks may be located on the territory of another European Union (EU) Member State subject to the conclusion of an international agreement between Poland and that State (article 9(2) OSAC). Article 9(5) OSAC further provides that the competent Polish authority should take the physical availability of emergency stocks into account when contemplating the authorisation of particular storage locations.
Sale of excess stocks
N/A
Mechanisms to address emergency
General
When Poland’s fuel security is threatened (article 32(1)(1) OSAC) or when emergency measures are required to comply with international obligations (article 32(1)(2) OSAC), the Polish OSAC provides for various emergency measures ranging from stock release measures to demand restraint.
In addition to specific emergency measures outlined below, article 31(1) OSAC obliges producers and traders to develop emergency plans detailing procedures to address emergencies. The minister responsible for energy is obliged to prepare an emergency plan that takes into account to which extent Poland is exposed to the possibility of supply security disruptions (article 8(3) SRA). The minister responsible for energy prepares also the handbook of interventions, constituting a set of procedures taken by him in a crisis situation (article 41a(1) OSAC).
According to article 44(1) OSAC, the voivodes draw up action plans aimed at ensuring the implementation of the restrictions aimed at trading in fuels and reducing the consumption of fuels.
It is noteworthy that Poland’s OSAC also explicitly acknowledges the possibility of requesting assistance from the European Commission and from other international organisations in case national emergency measures prove insufficient to address a supply disruption (article 48(1) OSAC).
Stockdraw
Sale/Tender
According to article 33(1)(3)(a-b) OSAC, producers and traders may respond to emergency situations by releasing emergency stocks by selling certain quantities of emergency stocks to determined entities or by lowering the required level of emergency stocks and selling them on the market. Any stock released must be sold at the market price of the stock on the day of their release (article 33(1)(3)(b)(4) OSAC).
Article 33(2a) OSAC provides that minister responsible for energy may by way of a decision reduce the agency stocks of crude oil and petroleum products specifying the scale of the reduction of these stocks, the selling price of crude oil and petroleum products as well as the manner of and the time limit for re-establishing these stocks– taking under consideration recommendations of European Commission on the time limit for re-establishing these stocks if specified.
Production Surge
N/A
Demand restraint
In addition to stock drawing measures, the OSAC also provides for the possibility of restraining demand for crude oil and fuel products by allowing for the restriction of economic activities in fuel-related sectors (article 32(2)(3) OSAC) or by reducing permissible limits of fuel consumption by customers (article 32(2)(4) OSAC).
More specifically, articles 40(1)(1-3) OSAC provide that the Polish Council of Ministers may at the request of the minister responsible for energy determine at times of emergency that the quantity of fuel sold by petrol stations during the day may be limited, that a limit shall be imposed on fuel purchases by individuals, or that the hours during which fuel may be purchased at petrol stations shall be limited.
Additionally, article 41 OSAC authorises the Council of Ministers to order, at the request of the minister responsible for energy, the taking of the following demand restraint measures: restricting the sale of fuel to those customers who can obtain a written authorisation to receive fuel (article 41(1)(1) OSAC), the restriction or ban of selling fuel to containers other than fuel tanks that are an integral part of a motor vehicle (article 41(1)(2) OSAC), restricting the maximum speed of vehicles (article 41(1)(3) OSAC), restricting the use of motor vehicle in internal waters and in the territorial sea of Poland (article 41(1)(4) OSAC), prohibiting motor events (article 41(1)(5) OSAC), restricting the transport of goods and people (article 41(1)(6) OSAC).
Any measures taken must take into account the interests of protecting the adequate functioning of the state, the economy, the protection of life, health and safety of the citizens (article 41(2) OSAC).
Fuel Switching
N/A
Relaxations of Road Traffic and Transport Laws
N/A
Monitoring and enforcement of emergency regime
Poland’s emergency regime is monitored and enforced on the domestic, regional and international level. Each will be considered in turn.
Domestic
Reporting duties
According to article 11a(1) OSAC, the president of ARM should publish information on the volume and compositions of emergency stocks held both on an annual and on a monthly basis (11a(10) OSAC). Likewise, article 11a(2) OSAC stipulates that producers and traders must submit to the president of ARM information concerning the volume and composition of their emergency stocks (see also article 23 OSAC).
According to article 38 OSAC, in the case of a threat to the fuel security of the state or the need for Poland to meet its international obligations, with respect to securing the market of crude oil and fuels fuel producers and traders, are obliged to promptly provide to the President of the Material Reserves Agency, on every request, information on crude oil brought in, fuels produced and brought into the country, and the structure of the production and bringing in of fuels.
Information also includes crude oil and fuels brought out of Poland, as well as the structure of fuels brought out; the compulsory stocks of crude oil and fuels accumulate and stored, their structure and storage locations; the commercial stocks of crude oil and fuels maintained, their structure and storage locations and information on the production of fuels planned by the producers, or on the amounts of crude oil and fuels contracted or planned to be brought in by traders, and also on their planned sales within the intra-Community deliveries and exports. The President of the Material Reserves Agency shall forthwith submit the information the minister competent in the matters of energy.
Enforcement
According to article 29(1) OSAC, the chairman of ARM has the competence to inspect whether or not producers and traders are complying with their stockholding obligation in accordance with the provisions of OSAC.
Specifically, ARM officials are entitled to enter premises of producers and traders, review documents, to conduct interviews and to take sample of emergency stocks (article 29(5) OSAC, see also article 44-46 SRA).
In certain cases the Polish police may assist, if required, with ensuring compliance with the terms of the OSAC (article 43(2)(2) OSAC) and articles 63-64 OSAC provide for the imposition of fines for violations of the provisions of the OSAC.
Regional
European Union
As a Member State of the European Union, Council Directive 2009/119/EC obliges Poland 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.
Poland’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).
International
The IEA
As a member of the International Energy Agency (IEA), Poland 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 (art. 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP.