Muscat: Starting from December 6, 2024, consumers in Oman will be required to pay an insurance fee when purchasing a liquefied petroleum gas (LPG) cylinder for the first time, according to the Ministry of Commerce, Industry and Investment Promotion (MoCIIp). On Monday, Minister Qais Mohammed Al Yousef of MoCIIP issued Ministerial Resolution No. 185/2024, which focuses on regulating the filling and selling of LPG cylinders. This new resolution replaces previous decisions, specifically 15/88, which prohibited the sale of LPG cylinders except in licensed warehouses, and 11/94, which regulated the sale, maintenance, and replacement of damaged cylinders.
The objective of this new regulation, which will take effect 180 days after its publication in the Official Gazette, is to ensure a smooth supply chain and provide transparency regarding the identity of each company involved in the distribution of cylinders to the end consumer.
Deposit amount for the cylinder with an identification
The practice of filling and selling LPG cylinders is governed by regulations that require the user to pay a security deposit. This deposit must be given to the licensee who is engaged in the sale of LPG cylinders and also owns the cylinder with identification.
Once the security deposit is paid, the user can obtain a cylinder with identification and exchange it for the cylinder they currently own, without having to pay another security deposit. The refund of the security deposit will be given when the user returns the cylinder with identification to the distributor, without receiving another cylinder in return. However, if the cylinder with identification is lost or misused, the licensee has the right to confiscate the security deposit as stated in the regulations.
The Ministry has provided further clarification on the new gas regulations, highlighting the benefits they offer. These include the Ministry of Commerce, Industry, and Investment Promotion being responsible for regulating and monitoring the activity, while the Ministry of Energy and Minerals oversees the regulation of cylinder sales.
Additionally, the prices of cylinders will be determined by the Minister of Commerce, with the approval of the Ministry of Finance. The regulations also require licensees to replace cylinders with identification with iron cylinders within three years from the effective date of the decision (December 6, 2027).
Furthermore, starting from December 2024, gas cylinder consumers are required to pay a security deposit for the first time and receive a receipt for the amount paid. It is also mandatory to replace gas cylinders within a specific period of time, which is three years after the decision is implemented.
Lastly, consumers should ensure they receive a purchase invoice for the cylinder they have purchased.
Insurance amount for the ventilated cylinder:
The individual acquiring the ventilated cylinder is required to make a one-time insurance payment in order to obtain it, with the amount determined based on the cylinder's type, capacity, and size. If the user wishes to exchange their current cylinder for one with a specific ID, they can do so without paying the insurance fee.
The consumer must pay the insurance fee to the gas cylinder seller, who then transfers the amount to the individual responsible for filling the cylinder as its owner. The policy allows for a refund of the insurance fee if the user returns the cylinder without receiving a replacement. However, if the cylinder is lost or misused, the insurance amount will be forfeited.
For filling and selling activities
The acquisition of a license is necessary in order to engage in the filling and selling of liquefied petroleum gas cylinders.
The Ministry of Commerce, Industry and Investment Promotion's General Directorate of Industry is tasked with monitoring license holders to ensure compliance with regulatory provisions, overseeing any violations, and implementing appropriate measures in response.
Procedures for obtaining a licence
A license to engage in the filling of LPG cylinders is granted based on the demands of the market. In cases where it is deemed necessary for the public interest, the Ministry has the authority to decrease the amount of LPG allocated to the licensee for cylinder filling purposes. The filling of LPG cylinders is to be carried out through two separate licenses in two distinct locations. The duration of the license is one year.
The licensee, who is authorized to perform the activity of filling LPG cylinders, must comply with the following conditions:
1. Conducting the licensed activity within the designated geographical area specified in the license.
2. Selling the cylinders to a licensed commercial facility, also known as a cylinder warehouse.
3. Ensuring that the selling price of the cylinder does not exceed the specified price.
Administrative penalties
The Ministry was granted the authority to apply various penalties, which could include a written warning, an administrative fine of up to OMR1,000, license suspension, or cancellation.
