Council Directive 98/93/EC of 14 December 1998 amending Directive 68/414/EEC imposing an obligation on Member States of the EEC to maintain minimum stocks of crude oil and/or petroleum products
Date: 1998-12-14
Institutions: Council of the European Union
Subjects: crude oil, energy consumption, minimum stock, petroleum product, security of supply, storage of hydrocarbons

L 358/100

EN

Official Journal of the European Communities

31. 12. 98

COUNCIL DIRECTIVE 98/93/EC

of 14 December 1998

amending Directive 68/414/EEC imposing an obligation on Member States of the
EEC to maintain minimum stocks of crude oil and/or petroleum products

THE COUNCIL OF THE EUROPEAN UNION,

(4) Whereas it is important that the security of oil

supply is enhanced;

Having regard to the Treaty establishing the European
Community, and in particular Article 103a(1) thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Parlia-
ment (2),

Having regard to the opinion of the Economic and Social
Committee (3),

(1) Whereas

the Council

adopted Directive 68/
414/EEC of 20 December 1968 imposing an obli-
gation on Member
the European
Economic Community to maintain minimum
stocks of crude oil and/or petroleum products (4);

States of

or

such

products,

(2) Whereas imported crude oil and petroleum prod-
ucts continue to play an important role in the
Community’s energy supplies; whereas any diffi-
culty, even temporary, having the effect of reducing
supplies
significantly
of
increasing the price
thereof on international
markets, could cause serious disturbances in the
economic activity of the Community; whereas the
Community must be in a position to offset or at
least to diminish any harmful effects in such a case;
whereas it
is necessary to update Directive 68/
414/EEC adapting it to the reality of the internal
market of the Community and the evolution of the
oil markets;

(3) Whereas in Directive 73/238/EEC (5) the Council
decided upon appropriate measures — including
drawing on oil stocks — to be taken in the event of
difficulties in the supply of crude oil and petro-
leum products
the Community; whereas
Member States have undertaken similar obligations
in the Agreement on an ‘International Energy
Programme';

to

(1) OJ C 160, 27. 5. 1998, p. 18.
(2) OJ C 359, 23. 11. 1998.
(3) Opinion delivered on 10-11 September 1998 (not

yet

published in the Official Journal).

(4) OJ L 308, 23. 12. 1968, p. 14. Directive as amended by

Directive 72/425/EEC (OJ L 291, 28. 12. 1972, p. 154).

(5) OJ L 228, 16. 8. 1973, p. 1.

(5) Whereas it

is necessary that

the organisational
arrangements for oil stocks do not prejudice the
smooth running of the internal market;

(6) Whereas the provisions of this Directive do not
affect the full application of the Treaty, in partic-
ular the provisions concerning the internal market
and competition;

(7) Whereas, in accordance with the principle of sub-
sidiarity and in accordance with the principle of
proportionality as stipulated in Article 3b of the
Treaty, the objective of maintaining a high level of
security of oil supply in the Community through
reliable and transparent mechanisms based on soli-
darity amongst Member States and, at the same
time, complying with the rules of
the internal
market and competition, can be carried out more
adequately at the level of the Community; whereas
this Directive does not exceed what is necessary to
achieve this objective;

(8) Whereas it

is necessary that stocks are at

the
disposal of Member States should difficulties in oil
supply arise; whereas Member States should possess
the powers and the capacity to control the use of
stocks so that they can be made available promptly
for the benefit of the areas which most need oil
supplies;

(9) Whereas organisational arrangements for the main-
tenance of stocks should ensure the stocks’ avail-
ability and their accessibility to the consumer;

(10) Whereas

it

is

appropriate

that organisational
arrangements for the maintenance of stocks are
transparent, ensuring a fair and non-discriminatory
sharing of the burden of the stock-holding obliga-
tion; whereas, therefore, information relating to the
cost of holding oil stocks may be made available by
Member States to interested parties;

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(11) Whereas, in order to organise the maintenance of
stocks, Member States may have recourse to a
system based on a stockholding body or entity
which will hold all, or part, of the stocks making
the
up their
balance, if any, should be maintained by refiners
and other market operators; whereas partnership
between the Government and the industry is essen-
tial to operate efficient and reliable stockholding
mechanisms;

stockholding obligation; whereas

(12) Whereas

indigenous production contributes

in
itself to security of supply; whereas the oil market
evolution can justify an appropriate derogation
from the obligation to maintain oil stocks for
Member States with indigenous oil production;
whereas, in accordance with the principle of sub-
sidiarity, Member States may exempt undertakings
from the obligation to maintain stocks in respect of
an amount not exceeding the quantity of products
which those undertakings manufacture from indi-
genously produced crude oil;

(13) Whereas it

is appropriate to adopt approaches
which are already followed by the Community and
the Member States within their international obli-
gations and agreements; whereas, owing to changes
international
in the pattern of oil consumption,
an important
aviation bunkers have become
component of this consumption;

(14) Whereas there is a need to adapt and simplify the
reporting mechanism

statistical

Community
concerning oil stocks;

(15) Whereas oil stocks can,

in principle, be held
anywhere in the Community and, therefore, it is
appropriate to facilitate the establishment of stocks
outside national territory; whereas it is necessary
that decisions for holding stocks outside national
territory are taken by the Government of
the
Member State concerned according to its needs and
supply security considerations; whereas in the case
of stocks held at the disposal of another under-
taking, or body/entity, more detailed rules are
needed to guarantee their availability and access-
ibility in the event of oil supply difficulties;

(16) Whereas it

is desirable,

in order to ensure the
smooth running of the internal market, to promote
the use of agreements between Member States
concerning minimum stockholding in order to
further the use of storage facilities in other Member
the Member States
for
States; whereas

is

it

concerned to take the decision to conclude such
agreements;

(17) Whereas

it

is

appropriate

to strengthen the
administrative supervision of stocks and establish
efficient mechanisms for the control and verifica-
tion of stocks; whereas a regime of sanctions is
necessary to impose such a control;

(18) Whereas Directive 72/425/EEC raised from 65 to
90 days the reference period appearing in the first
paragraph of Article 1 of Directive 68/414/EEC
and laid down the conditions to implement this
increase; whereas that Directive has been rendered
obsolete by this Directive; whereas Directive 72/
425/EEC should therefore be repealed;

(19) Whereas it is appropriate to inform the Council on
a regular basis on the situation concerning security
stocks in the Community,

HAS ADOPTED THIS DIRECTIVE:

Article 1

Directive 68/414/EEC is hereby amended as follows:

1. Article 1 shall be replaced by the following:

‘Article 1

1. Member States shall adopt such laws, regulations
or administrative provisions as may be appropriate in
order to maintain within the European Community at
all times, subject to the provisions of Article 7, their
stocks of petroleum products at a level corresponding,
for each of the categories of petroleum products listed
in Article 2, to at least 90 days’ average daily internal
consumption in the preceding calendar year referred
to in Article 4.

2.
That part of internal consumption met by deriva-
tives of petroleum produced indigenously by the
Member State concerned may be deducted up to a
the said consumption. The
maximum of 25 % of
distribution within the Member States of the result of
such a deduction shall be decided by the Member State
concerned.';

2. Article 2 shall be deleted;

3. the existing Article 3 shall become Article 2 and shall

be supplemented by the following paragraph:

‘Bunker supplies for sea-going vessels shall not be
included in the calculation of internal consumption.';

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4. the following Article shall be inserted:

‘Article 3

1.
Stocks maintained in accordance with Article 1
shall be fully at the disposal of Member States should
difficulties arise in obtaining oil supplies. Member
States shall ensure that they have the legal powers to
control the use of stocks in such circumstances.

ensure that they comply with their new obligations as
soon as possible and, in any event, at the latest by 31
July in each year.

In the statistical summary, stocks of jet fuel of the
kerosene type shall be reported separately under
category II.';

6. Article 5 shall be replaced by the following:

At all other times, Member States shall ensure the
availability and accessibility of these stocks; they shall
establish arrangements allowing for the identification,
accounting and control of the stocks.

‘Article 5

2. Member States shall ensure that fair and non-
discriminatory conditions apply in their stockholding
arrangements.

The cost burden resulting from the maintenance of
stocks in accordance with Article 1 shall be identified
by transparent arrangements. In this context, Member
States may adopt measures to obtain appropriate infor-
mation regarding the cost burden of stockholding in
accordance with Article 1 and to make such informa-
tion available to interested parties.

3.
To fulfil the requirements of paragraphs 1 and 2,
Member States may decide to have recourse to a stock-
holding body or entity which will be responsible for
holding all or part of the stocks.

Two or more Member States may decide to have
recourse to a joint stockholding body or entity. In that
case they shall be jointly responsible for the obliga-
tions deriving from this Directive.';

5. Article 4 shall be replaced by the following:

‘Article 4

Member States shall submit to the Commission a stat-
istical summary showing stocks existing at the end of
each month, drawn up in accordance with Articles 5
and 6 and specifying the number of days of average
consumption in the preceding calendar year which
those
summary must be
submitted at the latest by the 25th day of the second
month after the month to be reported.

represent. This

stocks

A Member State’s stockholding obligation shall be
internal
based on the previous
consumption. At the beginning of each calendar year,
Member States must re-calculate their stockholding
obligation at the latest by 31 March in each year and

calendar

year’s

Stocks required to be maintained by Article 1 may be
maintained in the form of crude oil and intermediate
products, as well as in the form of finished products.

In the statistical summary of stocks provided for in
Article 4, finished products shall be accounted for
according to their actual tonnage; crude oil and inter-
mediate products shall be accounted for:

— in the proportions of

for each
category of product obtained during the preceding
calendar year
the State
concerned, or

from the refineries of

the quantities

— on the basis of the production programmes of the
refineries of the State concerned for the current
year, or

— on the basis of the ratio between the total quantity
manufactured during the preceding calendar year
in the State concerned of products covered by the
obligation to maintain stocks and the total amount
of crude oil used during that year; the foregoing
shall apply to not more than 40 % of the total
obligation for the first and second categories (petrol
and gas oils), and to not more than 50 % for the
third category (fuel oils).

Blending components, when intended for processing
into the finished products listed in Article 2, may be
substituted for
for which they are
intended.';

the products

7. Article 6 shall be amended as follows:

(a) Paragraph 1 shall be replaced by the following:

‘1. When calculating the level of minimum
stocks provided for in Article 1, only those quant-
ities which would be held in accordance with
Article 3(1) shall be included in the statistical
summary.';

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(b) Paragraph 2 shall be replaced by the following:

— they must as a general rule be concluded for an

unlimited period,

For

the purposes of

‘2.
implementing this
Directive, stocks may be established, under agree-
ments between Governments, within the territory
of a Member State for the account of undertakings,
or bodies/entities, established in another Member
State. It is for the Government of the Member State
concerned to decide whether to hold a part of its
stocks outside its national territory.

In such cases, the Member State on whose territory
the stocks are held under the framework of such an
agreement shall not oppose the transfer of these
stocks to the other Member States for the account
of which stocks are held under that agreement; it
shall keep a check on such stocks in accordance
with the procedures specified in that agreement but
shall not include them in its statistical summary.
The Member State on whose behalf the stocks are
held may include them in its statistical summary.

In such cases, together with the statistical summary
provided for by Article 4, each Member State shall
send a report to the Commission concerning the
stocks maintained within its own territory for the
benefit of another Member State, as well as the
stocks held in other Member States for its own
benefit. In both cases, the storage locations and/or
companies holding the stocks, quantities and
product category — or crude oil — stored will be
indicated in the report.

Drafts of the agreements mentioned in the first
subparagraph shall be sent
to the Commission,
which may make its comments known to the
Governments concerned. The agreements, once
concluded, shall be notified to the Commission,
which shall make them known to the other
Member States.

Agreements shall satisfy the following conditions:

— they must relate to crude oil and to all petro-
leum products covered by this Directive,

— they must lay down conditions and arrange-
ments for the maintenance of stocks with the
aim of safeguarding control and availability of
these stocks,

— they must state that, where provision is made
for unilateral termination, the latter shall not
operate in the event of a supply crisis and that,
in any event,
the Commission shall receive
prior information of any termination.

When stocks established under such agreements
are not owned by the undertaking, or body/entity,
which has an obligation to hold stocks, but are
held at the disposal of this undertaking, or body/
entity, by another undertaking, or body/entity, the
following conditions shall be met:

— the beneficiary undertaking, or body/entity,
must have the contractual right to acquire these
stocks throughout the period of the contract;
the methodology for establishing the price of
such acquisition must be agreed between the
parties concerned,

— the minimum period of such a contract must

be 90 days,

— storage location and/or companies holding the
stocks at the disposal of the beneficiary under-
taking, or body/entity, as well as quantity and
category of product, or crude oil, stored in that
location must be specified,

— the actual availability of the stocks for the bene-
ficiary undertaking, or body/entity, must be
guaranteed, at all times throughout the period
of the contract, by the undertaking or body/
entity holding the stocks at the disposal of the
beneficiary undertaking, or body/entity,

— the undertaking, or body/entity, holding the
stocks at the disposal of the beneficiary under-
taking, or body/entity, must be one which is
subject to the jurisdiction of the Member State
on whose territory the stocks are situated
insofar as the legal powers of that Member State
to control and verify the existence of the stocks
are concerned.';

(c) Paragraph 3,

second subparagraph,

shall be

replaced by the following:

— they must specify the procedures for checking
and identifying the stocks provided for, inter
alia, the methods for carrying out and cooper-
ating on inspections,

‘Consequently the following shall, in particular, be
excluded from the statistical summary: indigenous
crude oil not yet extracted; supplies intended for
the bunkers of sea-going vessels; supplies in direct

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31. 12. 98

tank-wagons,

transit apart from the stocks referred to in para-
graph 2; supplies in pipelines, in road tankers and
rail
in the storage tanks of retail
outlets, and those held by small consumers. Quant-
ities held by the armed forces and those held for
them by the oil companies shall also be excluded
from the statistical summary.';

8. the following Article shall be inserted:

‘Article 6a

Member States shall adopt all the necessary provisions
and take all the necessary measures to ensure control
and supervision of stocks. They shall put in place
mechanisms to verify the stocks according to the
provisions of this Directive.'

9. the following Article shall be inserted:

‘Article 6b

the national provisions

Member States shall determine the penalties applicable
to breaches of
adopted
pursuant to this Directive and shall take any measure
necessary to ensure the implementation of these provi-
sions. The penalties shall be effective, proportionate
and dissuasive.'

Article 2

Directive 72/425/EEC shall be repealed with effect from
31 December 1999.

official publication. The methods of making such refer-
ence shall be laid down by the Member States.

Article 4

specific

characteristics,

Owing to its
the Hellenic
Republic shall be granted a non-renewable additional
period of three years to apply the obligations of this
Directive in relation to the inclusion of bunker supplies
for international aviation in the calculation of internal
consumption.

Article 5

situation concerning stocks

The Commission shall submit regularly to the Council a
report on the
in the
Community,
including if appropriate on the need for
harmonisation in order to ensure effective control and
supervision of stocks. The first report shall be submitted
to the Council during the second year following the date
stipulated in Article 3(1).

Article 6

This Directive shall enter into force on the date of its
publication in the Official Journal of the European
Communities.

Article 7

Article 3

This Directive is addressed to the Member States.

1. Member States shall bring into force the laws, regula-
tions and administrative provisions necessary to comply
with this Directive before 1 January 2000. They shall
forthwith inform the Commission thereof.

2. When Member States adopt these measures, they
shall contain a reference to this Directive or shall be
accompanied by such a reference on the occasion of their

Done at Brussels, 14 December 1998.

For the Council

The President

W. MOLTERER