petroleum_sector

Petroleum Sector Technical Support – Rwanda

Sponsored by UK DFID

Final Report

March, 2010

I.G. THOMSON

Petroleum Sector – Rwanda Final Report

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Contents

!"#$%&'(&)'*+%*+,& & & & & & & & &&&&&&&-".%&1.! Executive Summary 4!2.! Introduction 7!3.! The Petroleum Sector in Rwanda 10!

3.1! Background to Petroleum Sector 10!3.2! Demand 12!3.3! Storage 12!3.4! Pricing and subsidies 14!3.5! Filling Stations 14!3.6! Japanese grant oil 14!3.7! Government Stocks and Compulsory Stocks 15!3.8! Health, Safety and Environment 15!3.9! Legal and Regulatory/Licensing 15!3.10! Note on Recent Ugandan Upstream Developments 15!3.11! Objectives of Government 16!

4.! Taxes and Duties 18!4.1! Introduction 18!4.2! Taxation System 18!

5.! Institutional Issues 19!5.1! Introduction 19!5.2! MININFRA and MINICOM Roles 20!5.3! PSU Roles, Goals and Staffing 22!5.4! Further Development of Duties and Powers of PSU 23!5.5! RURA 24!5.6! Other Agencies 25!

6.! Petroleum Legislation/ Regulation 26!6.1! Draft Petroleum Law 26!6.2! EAC Legislation and Regulations 26!6.3! Licences 26!6.4! Technical Committee 27!6.5! Competent Authorities for Petroleum 27!6.6! Introduction 29!6.7! Licences 29!6.8! Import Licence Issues 30!6.8.1! General Considerations 30!6.9! Form of Import Licence 31!6.10! Import Documentation 31!6.11! Retail Licences 32!6.12! Distribution Licences 32!6.13! Additional Regulations 33!6.14! Initial Consultations 34!

7.! Stabilising the Price of Oil Products 35!7.1! Pricing 35!


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7.2! Pricing Policy 35!7.3! Bulk Purchasing 36!

8.! Japanese Oil Grant 38!9.! Compulsory Stock Obligations 40!

9.1! International Practice 40!9.2! Neighbouring Countries 42!9.2.1! Introduction 42!9.2.2! Kenya 42!9.2.3! Uganda 43!9.3! Capacity Constraints at Depots 44!9.4! Retail/ Distribution Stocks 46!9.5! Security of Supply 46!9.6! High Level Task Force Nov 2006 - Recommendations 47!9.7! Costs of New Tankage 48!9.8! Provisional Recommendations 49!

10.! Technical – Standards and Operational Safety 50!10.1! Introduction – Feb 2006 MINICOM High Level Task Force 50!10.2! Comments 52!10.3! EIAs 53!10.4! Transport by Road 53!10.5! Standards for Road Tank Wagons 54!10.6! Standards for Filling Stations 56!10.7! Occupational Health and Safety 56!10.8! Standards for Storage Sites 56!10.9! Fuel Standards and Quality 57!

11.! Discussion and Recommendations on Way Forward 58!11.1! Market Issues 58!11.2! Discussion and Recommendations 58!11.3! National Policy Objectives 61!

APPENDIX A – PETROLEUM CODES AND STANDARDS (UK) 1!APPENDIX B – DISTILLATION OF STANDARDS IN THE FORM OF A CHECKLIST 1!APPENDIX C – EAC PETROLEUM CODES AND STANDARDS 1!APPENDIX D – DRAFT PETROLEUM LAW 1!APPENDIX E – POLICY IMPLEMENTATION AND PROGRESS 1!APPENDIX F – REFERENCES 1!APPENDIX G – DFID TERMS OF REFERENCE 1!


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1. Executive Summary

Supply and Demand

Rwanda depends entirely on imported petroleum products. The imports normally transit through a northern corridor from Mombasa via Uganda but there is a longer and more expensive route to the south from Dar-es-Salaam. This was used during 2008/9 when the northern route was subject to extended disruptions at the time of the Kenyan elections, there were capacity restrictions in the Kenyan oil pipeline and when a supplier responsible for bulk purchase of products for Kenya became insolvent. Rwanda is particularly susceptible to supply problems and the extended routes mean that pump prices are amongst the highest in the region.

Total monthly consumption is just over 15 million litres (all types of fuel combined). The total storage capacity of 30.6 million litres covers only 2 months of consumption needs and half of this is probably needed for working stocks for operational reasons. Excluding storage of Jet A1for Kigali airport, there are four storage facilities: one private facility of 5.45 million litres and three government facilities totalling 23.65 million litres (81% of total capacity) of which one facility of 15.35 million litres (53% of total capacity) is leased to a private operator. The private and leased facilities are used by both the dealers and the government. More storage is urgently needed to improve the security of supply.

Approximately 75% of all oil stocks excluding Jet A1 are owned by the Government. The Government’s stocks of petroleum products comprise strategic stocks and oil provided under the Japanese Fuel Grant (fuel donated and to be sold to raise funds for development projects). No agreement was reached with the Japanese government in 2008 and it now seems unlikely that an agreement will be reached for 2009 for further oil shipments. In addition to investigations in Kigali, the Consultant met with the Crown Agents in London to review the overall Japanese Fuel Grant system. The Rwandan National Audit Office has in the past criticised the PSU for poor bookkeeping of some deliveries but this was before the present staff in PSU were in post. Acting as governmental level stocks agency is a complicated operation and there is an urgent need to systematise the process and to prepare a set of guidelines to avoid future risks to the Government and to protect the staff themselves, given the levels of money that are involved.

There are reports of significant oil discoveries in Uganda (several hundred million barrels according to the 2008 Ugandan National Oil and Gas Policy), which could, once brought into production, alleviate many supply difficulties for the region. There is a distinct possibility that the hydrocarbon play extends along the Rift Valley into Rwanda. Upstream exploration is being progressed by the Rwandan Ministry of Infrastructure (MININFRA) and does not form part of this assignment.

MININFRA is involved in the building and rehabilitation of government storage facilities. The same Ministry is taking an active role promoting a future pipeline from Eldoret via Kampala to Rwanda, the first section of which is reportedly being built. Meanwhile private investors are being encouraged to invest in infrastructure projects but the high perception of country risk and the small size of the market deter many investors and companies like Shell and Total have withdrawn from Rwanda.

Management

The management of the petroleum sector on a daily basis is the responsibility of MINICOM. MINICOM plays an active role in mobilizing funds and investors to build the pipeline and extend storage capacity in the country. In order to enable the Ministry to carry out this responsibility, in 2006, Cabinet approved the creation of a Petroleum Special Unit (with 2 staff to start with; the full complement is now 5 although even now the unit is below strength). Agreeing a development programme to enhance capacity at the PSU is a key recommendation.


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Policy

MINICOM has established a mechanism of consultation, dialogue and negotiation with the dealers. Other stakeholders in Government such as MINECOFIN, MININFRA, RRA, and others outside Government such as the transporters also participate in the Pricing Committee forum. Meetings are held regularly, until recently at least every end of month, to agree on pump prices that are going to prevail for the following period. There is an agreed price structure, which has made it possible for Government to limit the impact of fuel price increases within the country. Price controls appear in general not to be used in many other sectors in Rwanda, as price regulation is perceived to be contrary to free market reform policies. The mechanism to reduce oil product prices involves foregoing fiscal revenue rather than squeezing industry’s profit margins to encourage more competition and greater efficiency. This system has negative macroeconomic implications for the economy. It is difficult for the Ministry of Finance to plan its revenues and it also places little incentive on industry players to control their prices. If the subsidies are financed by higher debt, it imposes future costs on Rwandans e.g. by raising interest rates. Large net subsidies will also threaten higher (general) inflation depreciation of the exchange rate. A more equitable price control system that is used in other countries was proposed during the course of the project but in the meantime, the Ministry of Finance, the RRA and MINICOM embarked on a much wider initiative to harmonise pricing, taxation and tax compliance systems across the EAC and this is expected to replace the current price control system shortly. In the meantime international oil prices have fallen from the $146/ barrel peak to around $70 to 80/ barrel which has eased pressure on the sector.

One of the possible mechanisms to reduce prices is to encourage bulk purchasing. The feasibility of this initiative, which is favoured by the Government, will in part depend on the availability of new storage facilities. These are currently almost full. The rationale is that instead of having lots of small packets of oil delivered, it might be possible to arrange to have a single importer and gain economies of scale and other logistical advantages. This single importer would be selected on a competitive tendering basis with regular retendering to avoid lock-in. The advantages of implementing such a scheme are likely to be small because of the modest volumes involved. The Consultant provided a substantial amount of data on gas oil and gasoline contracts and futures to the PSU in September 2009 to help them progress the proposal with the industry. A bulk purchase system also introduces the risk of the selected importer getting into financial trouble, as happened in Kenya with disastrous consequences. Moving along this path would however serve as a threat to the industry. It is almost certainly the case that current industry participants do not compete strongly enough on price and the threat of change might encourage greater efficiency. The threat should be maintained until such time as there is evidence of greater efficiency and more actual competition.

The project provided assistance in drafting a Petroleum Policy, which is now being taken to stakeholders for validation. This took account of the two high level Task Forces which reviewed the petroleum sector in or around 2006. The technical recommendations from the present project extend those in the high level Technical Task Force report.

Petroleum Law and Regulations

Currently, there is no overall law regulating the sector although these is a law dating from colonial times (1956) that provides some guidance for granting permits and licences. The project reviewed the institutional aspects and the roles of the key Government Ministries. The Report sets out the suggested interface between the Government and the Petroleum Special Unit, or PSU, which will be taking on many oversight functions for the sector. At present the PSU sits inside the Ministry of Trade and Commerce (MINICOM) but there is a possibility that it could become a separate governmental level agency in the future. The relationship between the PSU and the bodies responsible for standards, safety and fuel quality, the Rwanda Bureau of Standards (RBS), and the body responsible for environmental protection, the Rwanda Environmental Management Authority (REMA) were examined. The Report analyses the possible relationship between the PSU and the embryonic Rwanda Utilities Regulation Agency (RURA).


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The principal task was to assist with the drafting of a new Petroleum Law. The energy and petroleum laws and regulations from EAC and other countries such as the Republic of South Africa (RSA) were collected and reviewed with the PSU. The proposed draft Law covers all policy aspects in the Petroleum Policy, from the design and establishment of a new licensing system to the need to finding a means of encouraging industry to play a greater role in managing oil stocks. As a modern law, it touched on information systems, health safety and the environment, consumer rights and the path to liberalisation. The draft Petroleum Law does however differ from the Energy Laws of Kenya and RSA in that it does not first aim to set up an Energy Regulator. The draft Petroleum Law has been accepted at ministerial level in MINICOM and has been sent out to industry for consultation. There are a small number of issues still to be resolved, including penalties, the length of licences, the final choice of which body will issue those licences and permits and the role of local authorities.

The IEA and EAC rules for compulsory stock obligations (CSO) were analysed and it was concluded that in the first instance industry should be obliged to hold 7 days of stocks to complement the national strategic stocks. The exact number of days can be increase or decreased from time to time by regulation. This move is likely to be controversial as it places a burden on the industry in terms of extra working capital but the compulsory level of stocks is very much less than those required in OECD countries under IEA rules (typically 90 days including government strategic stocks). As with bulk purchasing, one of the issues is that there is very little spare capacity at existing storage sites. The order of magnitude of the likely costs of new storage was therefore examined, although the interface with third parties interested in investing in Rwandan infrastructure remains with MININFRA.

Codes and Standards

One of the more ambitious aims of the project was to provide initial assistance and advice on technical issues including codes and standards, approvals and inspection of facilities and the testing of fuel quality as there is likely adulteration of petroleum products (as is the case for most countries in the region). The Report contains:

(i) A technical checklist for filling stations, which should be of immediate assistance to RBS and the local authorities. This has been prepared using minimum standards prevailing in a number of countries and is judged to be fit for purpose for Rwanda, although this needs to be verified by RBS. An addendum to that checklist distils out a number of key technical principles from international standards for filling stations, road tankers and depots for possible use in Rwanda.

(ii) An explanation of the much wider scope of technical legislation, regulations, codes and standards that would apply in a country like the UK for downstream petroleum.

(iii) A list of EAC standards for petroleum that are currently being considered for adoption by RBS; and

(iv) Some other broader standards from Zambia, Kenya and the Republic of South Africa were identified which should be a useful starting point for consideration by RBS, e.g. standards for filling stations, road tankers and depots.

In 2008 there was an important RBS initiative to calibrate filling stations across the country at the behest of MINICOM. The next step now must be for RBS to set up standards committees for petroleum and become actively engaged in this work. Helping RBS move forward is a high priority and this would be the focus for any extension to the present work. There is an urgent need for capacity building at RBS and they also need to purchase test equipment. It is also recommended that Rwanda seeks donor aid to lease a mobile test laboratory for say 6 months to test road fuel quality. There should be a strong training component to ensure that staff and inspectors at RBS know how to calibrate, operate and maintain the test equipment.

Recommendations

The Report concludes with a number of recommendations in the context of the national policy objectives in the Petroleum Policy and a policy implementation matrix.


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2. Introduction

This is the final report on a consultancy assignment carried out by Ian Thomson of Adam Smith International (ASI) for the Government of Rwanda in the petroleum sector, under DFID funding. The Terms of Reference are set out in Appendix G. These were kindly reviewed by the Minister, Honourable Monique Nsanzabaganwa and Deputy Minister Honourable Vincent Karega on 24th September 2008. Ian Thomson would like to express his appreciation for all the help and advice provided by Mr Alex Rutabingwa, the Director of the Petroleum Special Unit (PSU) and his deputy, Mr Robert Opirah, during the assignment, and for the support of the Permanent Secretary, Mr Antoine Ruvebana.

Chapter 3 sets out the basic picture of the industry. There is no upstream production and exploration activity has been limited to overall geological reviews and aerial surveys and some seismic work. Upstream exploration is being progressed by the Rwandan Ministry of Infrastructure (MININFRA) and is not part of this assignment. Rwanda is a landlocked country and oil products which are central to the wellbeing of the economy have to reach Rwanda by a long route involving trucks either from the north via the Kenyan pipeline, with oil imported though Mombasa or refined at Mombasa, and thence by road across eastern Kenya and Uganda, or by a more expensive route to the south via Dar-es-Salaam. The northern route has been subject to various disruptions at the time of the Kenyan elections, due to unreliability of the Kenyan pipeline and most recently due to a supplier responsible for bulk purchase of products for Kenya becoming insolvent. This leaves Rwanda particularly susceptible to supply disruptions. The Chapter explains some of the features of the petroleum sector and ends with the Government’s objectives for the sector, as set out in the Petroleum Policy, which the Consultant helped to prepare. At present the public sector plays a large role in the sector, being responsible for managing most of the storage depots and also owning a large proportion of the strategic oil stocks.

Chapter 4 deals briefly with taxes and duties on white oils. The fiscal system was not part of the Consultant’s remit. The relevance of this area is that stable revenue generation from the petroleum sector is vital to the well being of the Rwandan economy. Any changes to petroleum laws or licensing and to price control strategies may affect the way in which such revenues are generated.

Chapter 5 moves on to review the institutional side of the sector and the role that the various Government Departments play and how this project sees these roles developing. In particular this sets out the suggested interface between the Government and the Petroleum Special Unit, or PSU, which will be taking on many regulatory functions for the sector. At present the PSU sits inside the Ministry of Trade and Commerce (MINICOM) but there are plans for it to become a separate governmental level agency in the future. The relationship between this unit and the bodies responsible for standards, safety and fuel quality, the Rwanda Bureau of Standards (RBS), and the body responsible for environmental protection, the Rwanda Environmental Management Authority (REMA) is developed. The possible overlap between the PSU and the embryonic Rwanda Utilities Regulation Agency (RURA) is analysed.

Chapter 6 discusses the development of a Petroleum Law. The principal activity was to assist with the drafting of a new Petroleum Law. EAC laws and regulations were collected and reviewed with the PSU. The draft Law covers all policy aspects in the Petroleum Policy, from designing and setting up a new licensing system to the need to finding a means of encouraging industry to play a greater role in managing oil stocks. As a modern law, it also had to touch on information systems, health safety and the environment, consumer rights and the path to liberalisation. The aim is to harmonise policies with those of the EAC and aim at a fully liberalised market. The law needs to include provisions for economic and potentially structural regulation to counter any distortions in the future market. A full draft of the Petroleum Law as accepted by the management committee and Minister of MINICOM for consultation by industry


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prior to passing to the Ministry of Justice is contained in Appendix D. This also incorporates changes requested by MININFRA’s legal team.

Chapter 7 describes the current price control system. A system of price controls is already well established in the Rwandan petroleum sector, as pump prices are set once a month by the Price Control Committee, at Ministerial level. To date the purpose of these controls has been to protect motorists and haulage firms from what otherwise would have been sharp price increases. Price controls appear in general not used in many other sectors in Rwanda, as price regulation is perceived to be contrary to free market reform policies. However the mechanism to reduce oil product prices is to forego fiscal revenue and this has negative macroeconomic implications for the economy, which are less well understood. Stabilising oil product prices is seen as an important policy issue, given the high transportation costs of oil imports to Rwanda, and the Government is exploring the idea of buying oils in bulk to reduce costs. Comments are made on the feasibility of this idea.

Chapter 8 looks at the Japanese oil grant system, in addition to discussions in Kigali, the Consultant met with the Crown Agents in London. The Rwandan National Audit Office has in the past criticised the PSU for poor bookkeeping. No agreement was reached in 2008 and it now seems unlikely that an agreement will be reached for 2009 for further oil shipments.

Chapter 9 looks into how to introduce private sector participation by means of compulsory stock obligations and other questions to do with private sector involvement in much needed new storage.

One of the more ambitious elements of the work was to provide initial assistance on technical and operational health and safety aspects. Chapter 10 covers many technical issues including codes and standards, approvals and inspection of facilities. It also deals briefly with QA of fuel quality, as there is likely adulteration of petroleum products. The Report notes the various technical legislation, regulations, codes and standards that would apply in a country like the UK for downstream petroleum, and shows how this fits together. The Report contains a detailed technical checklist for petroleum facilities, in particular filling station sites and storage, which should be of immediate assistance to RBS. It also distils out a number of key technical issues from international standards for filling stations and depots. In conjunction with the RBS, a list of EAC standards for petroleum that are currently being considered for adoption was prepared and also some other standards from Zambia, Kenya and the Republic of South Africa were identified which should be a useful starting point for consideration by RBS, e.g. local standards for filling stations, road tankers and depots.

The technical material that forms the basis of Chapter 10 and Appendices A, B and C was discussed with the previous Director General of RBS in late 2008 and with the Head of the Standards Unit at RBS in 2009 but so far the RBS has not made progress on this front. In 2008 there was a successful RBS initiative to calibrate filling stations across the country that was driven by the Director of PSU. There is urgent need of capacity building at RBS and there is almost no suitable test equipment. Helping RBS move forward is a high priority and this should be the focus for any extension to the present work.

Chapter 11 looks to the future and makes certain recommendations on the way forward. It is linked to the policy matrix in Appendix E.

This project takes full account of and supports all of the recommendations of the two special high level task forces which reviewed the petroleum sector in or around 2006:

• The first of these was entitled, “Draft Report on the Petroleum Sector Performance in Rwanda”, dated Feb 2006. This was led by MINICOM and involved MINICOM, the RRA (the Rwanda Revenue Authority), MINECOFIN and the Rwanda Bureau of Standards. This fieldwork and the conclusions were predominantly technically focussed and in the rest of this paper this will be referred to as the Technical Task Force. (Ref. 1)

• The second was also led by MINICOM. Its title in the electronic version provided by the PSU had a wider remit. There are no details in the document of who participated or who was co-opted. The description that it contains of its Terms of Reference said, “Ministry


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of commerce, industry, cooperatives, investment and tourism (MINICOM) put in place a committee to carry out a needs assessment, identify the gaps existing in the current laws and regulations concerning regulation of petroleum industry in Rwanda and propose/recommend measures for the industry improvement”. The resulting “Review of Petroleum Sector in Rwanda (Draft Report)” was issued in November 2006. This will be referred to as the High Level Task Force. (Ref. 2).


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3. The Petroleum Sector in Rwanda

3.1 Background to Petroleum Sector

All oil products have to be imported to Rwanda. The vast majority of the oil supply enters via a northerly route by pipeline from Mombasa to Nairobi then Eldoret in Kenya, then by truck via Uganda to Kigali. The existing Mombasa–Nairobi pipeline was reinforced in 2009. The route is illustrated in Figure 1.

Figure 1 Transportation Routes

Source: SAIC 2008 – Ref. 3

As a result, pump prices are amongst the highest in Africa.

The reliance on the northerly route exposed Rwanda to supply disruptions during the Kenyan electoral crisis of January and February 2008. Efforts were made to strengthen an alternative route to the coast through the port of Das-es-Salaam. The even higher transport costs and other trade related bottlenecks make this route less competitive compared to the Eldoret – Kigali route. The Rwandan authorities engaged the Tanzanian authorities with a view to removing some of those transit related bottlenecks and regular dialogue continues with the Kenyan and Ugandan authorities.

The planned Isaka - Kigali railway will also strengthen the position of Das-es-Salaam as the second alternative route if constructed. In the meantime however, the focus should be on using rail transport even before the construction of the Isaka - Kigali railway, as Isaka is connected to Dar-es-Salaam by railway, and petroleum products can be transported to Isaka by rail tankers and then transported to Kigali by road like other goods.

The trucking operation between Kenya and Rwanda is costly and has limited capacity, and this capacity is bound to be exceeded at some point as demand for white oils grows in S. Uganda, Rwanda and Burundi. Some indication of the relative cost of the routes is given in Figure 1.

The financing for a pipeline between Kenya and Kampala has been arranged and it was recently announced by the Ugandan government that the project has been restarted. This project is being promoted by Tamoil. However progress on this route may be affected by the discoveries of oil in Uganda.


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Figure 2 shows the basic capacities for the proposed Uganda to Rwanda oil pipeline.

Figure 2 Initial Estimates of Capacity of Uganda to Rwanda Pipeline

Source: SAIC – Ref 4.

The relative cost of the alternative routes is set out below in Figure 3. The derived costs in this figure come from a 2007 SAIC workshop (Ref. 4) but are broadly similar to those in the confidential spreadsheets that were prepared for the Pricing Committee in 2008 and 2009, which were made available to the Consultant (Refs. 5 and 6).


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Figure 3 SAIC’s Estimates of Relative Transportation Costs – 2007

Source: SAIC – Ref 4.

3.2 Demand

SAIC reported that Rwanda’s consumption of white oils (Diesel and Premium) grew at an annual rate of 19 % between 2004 and 2006 i.e. from 124,072 M3 to 172,987 M3 excluding jet fuel (Ref 3). In the same report, SAIC issued a bullish forecast of projected demand for white oil as a whole, with demand growing from 0.24 million M3, to 0.62 million M3 and 1.5 million M3 by 2010, 2020 and 2030 respectively.

In the event, from 2007 to 2009 it appears that there was very little demand growth in Rwanda, even for air traffic, due to world recession and very high oil prices.

There is no reason however why fairly high growth rates should not re-occur once the economy picks up in line with projected GDP growth and increased use/capita of oil products. Currently energy intensity is very low in comparison with more developed countries.

3.3 Storage

Rwanda currently has about 30 million litres of storage capacity at depots (Ref. 7).


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Existing petroleum storage capacity in millions of litres, by product, is given in Table 1 below:

Table 1 Storage Capability in Million Litres at Main Depots

Source: MINICOM Ref. 7. (These figures are not identical to those in the SAIC report in Ref. 3 but they are used by MINICOM on a daily basis and are undoubtedly more reliable)

The Petroleum Special Unit (PSU) considers that up to three times this much storage is needed, to balance the market and provide adequate security of supply given the extended and slow supply chain.

As explained later, all OECD countries require up to 90 days stocks in line with IEA and EU guidelines; but the position of Rwanda is inherently more vulnerable than some other countries.

There is also a need for commercial operators to hold stocks in tankage to support normal commercial operations (there are no pipelines in the country).

The five depots are under different management.

1) Gatsata depots (Kigali) - The depots are Government owned but have been leased to Kobil for a period of 30 years. (The storage used to be operated by a government owned company, PetroRwanda, but the operations were assigned to Shell Rwanda on 5th August 1999 and passed to Kobil Oil on 31st January 2006 in order to introduce more private sector involvement).

2) Kabuye depots (Kigali) - These are privately operated. The owner leased them to Total-Rwanda. However, Total is winding up its operations in Rwanda and some other neighbouring countries. Total-Rwanda has been bought by Engen and the Kabuye depots will be managed by Engen. (Ref. 9).

3) Bigogwe depots (about 120 km to the north of Kigali). These are Government owned. They have not been operational since 1994 because of damage sustained during the war. However, they were recently rehabilitated and were back in operation by 2Q 2009, although there are minor calibration problems with the tanks. The Consultant subsequently visited the site and witnessed RRA taking tank dips as the tanks are now full.

4) Rwabuye (about 140 km to the south of Kigali). These are Government owned. The site is in use but needs to be rehabilitated.

5) Kanombe (Kigali airport). These are Government owned but leased to a private company (Bakkri). They are used to store aviation fuel.

In Chapter 9 we will see that 75% of the oil stocks themselves currently belong to the government. It is evident that the public sector plays a very large part in the petroleum sector and

Site Super Diesel Jet A-1 Kerosene Fuel oil Total Gatsata 6.2 4.9 2.45 1.8 15.35 Kabuye 2.9 2.0 0.55 5.45 Rwabuye 1.8 1.8 3.6 Bigogwe 2.9 1.9 4.7 Kanombe 1.5 1.5 Total 13.7 10.6 1.5 2.5 2.35 30.6


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this should be reduced. The private sector should be engaged to build and operate new storage, as recommended later.

3.4 Pricing and subsidies

The Government levies various taxes on white oils but up to 100% of these taxes and duties have been waived during the past two years in an attempt to avoid the transport sector bearing too high an impact from oil price increases. The government Pricing Committee regularly meets to decide the end user prices, based on a cost plus estimate of the costs throughout the supply chain (e.g. oil product prices derived as a monthly average from Platts, transport costs etc). See Ref. 6. So far the importers and distributors have not had to bear any of the price cuts.

This means that pump prices throughout Rwanda are the same and distributors do not have to compete on price, just costs.

3.5 Filling Stations

According to the MINICOM Technical Task Force (Feb 2006) (Ref. 1), there were about 122 operational filling stations in Rwanda, most of them operating without any formal consents.

Many of these sites have no planning permission, local authority inspections (either through the planning/construction period or through their ongoing operations), nor are they paying local authority or business taxes.

The Government wishes to introduce a new regulatory regime that requires any enterprises engaging in the importation, distribution and sale of petroleum products (petroleum, oil or lubricants) to obtain a licence. An issue to be considered is which organisation is to be charged with the responsibility for supervising compliance with the regulation and licences issued under it; and for ensuring a reasonable and fair degree of competition, appropriate pricing policies and adequate inspection policies.

Such moves are likely to improve standards and also develop market infrastructure to better support this industry. The development of a more structured or “fair” market for all participants is likely to lead to major operators taking a more dominant role and also allowing for an investment strategy in the region. At present there are likely to be few operators prepared or able to make major investments in the market infrastructure (e.g. storage sites).

3.6 Japanese grant oil

Since about 2002, the Japanese government through Japanese Grant Aid has continued to give Rwanda an agreed value of oil products by way of a donation each year. The purchases are co-ordinated by the Petroleum Special Unit (for example who can draw up short lists of potentially qualified companies able to deliver oil to Rwanda and who specify the split between gasoline and gas oil required) and by the Crown Agents (located to the south of London), who place the contracts for purchase. The Petroleum Special Unit then organises a tender and sells the oil to local companies. The timing of these sales is to some extent controlled by the PSU so the Government takes on some market risk. The financial proceeds go into a special government enclave account and used for purposes agreed between the Japanese and the Ministry of Foreign Affairs. (Ref. 8).

This is obviously a key but time consuming task for the PSU that requires scrupulous handling. There would not seem to be any truly independent commercial organisation in the country to which it could be delegated (even at a cost).


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The National Audit Office has criticised MINICOM in the past over some accounting discrepancies regarding the Japanese oil in 2005 and 2006, prior to the present staff being involved in the Petroleum Special Unit. (Ref. 10).

3.7 Government Stocks and Compulsory Stocks

In addition to the Japanese grant oil, Government stores some of its own oil, which is kept in the same tanks as the oil owned by commercial operators. The Petroleum Special Unit manages these stocks in tandem with the Japanese grant oil volumes. The High Level Task Force (Nov 2006) (Reg. 2) suggested that this role might be extended and the PSU might in effect become a government oil company. This would however to some extent be contrary to wider initiatives to introduce increased private sector responsibility (for example under Vision 2020) and a national oil company is only needed to maximise value when there is local production. There is no formal policy for holding or releasing these oil stocks and this should be formalised. The PSU is not set up in the way a trading function in an oil company operates. It is recommended that a manual be produced that sets out the procedures and rules for dealing in these stocks to aid transparency.

The way forward needs to take account of the limited amount of storage that is physically available and the market structure in Rwanda. Many OECD countries conform to IEA CSO rules and hold 90 days stocks and member states in the EC also act under a European Directive to hold 90 days of stocks, with certain special rules and derogations that are explained in this paper. However some EAC countries impose less onerous requirements (holding oil stocks is tantamount to increasing the working capital) and this may be a better guide for Rwanda.

This is discussed further in Chapter 9, where it is proposed that the private sector starts to shoulder part of the burden of contingent oil stocks.

3.8 Health, Safety and Environment

In 2006 the Technical Task Force (Ref. 1) reviewed the technical, safety and environmental standards of the main storage sites, the trucks used to transport and distribute petroleum spirit and the filling stations themselves. It also looked briefly at product quality. The report was very critical of the installations and lack of standards and also the lack of inspection capability. It was recommended that urgent action be taken to introduce minimum standards and to start enforcing them, for existing as well as new facilities; however these findings do not as yet appear to have been actioned.

3.9 Legal and Regulatory/Licensing

This area requires urgent attention as the legislation and licensing system is in serious need of an overhaul. Care needs to be exercised only to introduce the minimum number of licences required and also not to set up systems that overflow from the petroleum sector into general trade licenses. It is also clear from the high level reviews of the sector that there is concern at government level as to the imprecise roles of importers, traders and distributors. The recommendations from this project are set out in Chapter 6.

3.10 Note on Recent Ugandan Upstream Developments

The Ugandan government has defined five Exploration Areas in the west of the country. The region stretches from its terminus at the Aswa Shear Zone in the north, southward through the Pakwach - Rhino Camp basin, Lake Albert basin, Semliki basin to the Lakes Edward and George basin at its southern end. The available blocks are Blocks 1, 2 4 and 5. (Ref. 11).


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Tullow holds interests in four licences in Uganda. Two of these, Block 1 and Block 3A, are new licences, acquired during 2004 while a third licence, Block 3, was extended for a further period of six years over a reduced area. The Turaco-2 well, which was drilled in Block 3 (Tullow 50%), encountered a number of hydrocarbon-bearing zones however, due to technical difficulties, the testing programme could not be completed and the well was abandoned in June 2004. Uganda is currently at a cusp in its upstream development with discussions taking place between the government, ENI and Tullow in the wake of Heritage’s planned exit and sale to ENI.

Tullow’s press statements, which are partly geared to how they are received the stock market, say that it “might be possible in the next ten years to produce 150,000 barrels a day”. “It could put Uganda in the top 50 oil producers in the world”. They are speaking of up to 700,000 or possibly 1 billion barrels in place. According to the National Oil and Gas Policy of February 2008, there are at least three hundred million barrels in the Kaiso-Tonya area where the Waranga, Nzizi and Mputa discoveries have been made although the extent to which these are commercially developable is unclear. The ENI/ Tullow dispute is expected to be resolved shortly but the difficulties of developing oil in Uganda and the length of time needed should not be underestimated.

Uganda also needs to plan for a medium sized refinery to meet needs unless the oil is to be piped out to the coast. The rift valley formation extends into Rwanda but the extent to which this is oil bearing is not known.

The Ugandan government plans to set up a national oil company to handle the government share of future oil and gas and channel investment and to capture additional value from the nation’s hydrocarbon resources.

3.11 Objectives of Government

The overall policy goals as set by the Petroleum Strategy (Ref. 7, reflecting National Energy Policy and National Energy Strategy – Ref. 12) are to ensure availability of reliable and affordable supplies of petroleum products and to ensure that they are used in a rational and sustainable manner in order to support national development goals.

The detailed policy Objectives of the Government are as follows.

1. To strengthen the upstream side of the petroleum sector, with the possibility of increasing supply to Rwanda.

2. To protect the welfare of Rwandans, particularly the poor, through price regulation and other price stabilization measures.

3. To strengthen the legal framework of the petroleum sector. 4. To establish standards for the petroleum sector and ensuring compliance. 5. To create safeguards for environmental protection and for safe working conditions in the

petroleum sector 6. To find means of mitigating shortages in supply at least in the medium term. 7. To reduce dependence on the single supply route for importing petroleum products. 8. To encourage the use of LPG.

In addition the institutional capacity of the Petroleum Special Unit itself needs to be strengthened urgently.

Each of these policy Objectives requires specific actions, most of which are discussed in this report. Objectives 1 and 8 come under MININFRA.

The Petroleum Strategy and the primary legislation developed under this project will be a basis for ensuring a systematic set of rules governing the sector.


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The Technical Task Force report (Ref. 1) started to identify high-level technical standards for the industry. The technical checklist for filling stations in Appendix B and the digest of international standards identified and discussed in Appendix A together with the various regional and EAC standards discussed in Appendix C should provide a reference point for policing and inspections in this industry.


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4. Taxes and Duties

4.1 Introduction

Imported petroleum products are collected from the storage sites after clearing with Rwanda Revenue Authority (RRA) the following taxes and duties:

• Import Duty

• Excise duty

• Value Added Tax (18%)

They are also subject to storage and road use charges that include the following:

• Redevance de concession

• Frais de passage and,

• Other incidental taxes.

The point in the supply chain at which duties are levied is at the exit of the initial storage depot (the depot is bonded). This enables much tighter tax compliance than setting the duty point downstream but means that it is much cheaper to store products at the initial storage depot rather than at other sites. VAT is payable at the point of sale.

4.2 Taxation System

In many countries duties are imposed based on fixed amounts rather than percentage of value. The benefit of fixed duty levels is that government income from the petroleum sector is not dependent on the oil price. Between January 1999 and July 2000 the international price of gasoline rose by more than 300% ($125/tonne to $390/tonne). Between mid 2000 and 2001 the price halved (to $200/tonne). Prices reached in excess of $800/ tonne in 2008.

Any tax revenue based on a percentage of the oil price is thus extremely volatile, which is not in the interests of managing government fiscal policy.

Uncertainty in revenue planning is exacerbated through the system of pricing control currently in operation, whereby prices are stabilized through deliberately foregoing tax and duty revenue

The consultant’s Terms of Reference did not include any consideration of the fiscal system for petroleum, however as the new licence system in the Petroleum Law tax collection system needed to be compatible with the RRA’s paperwork and electronic systems for collection of duties and taxes on petroleum products, the Consultant worked closely with the RRA’s senior management and site staff on this aspect.

The authorities are currently developing a different system such that the taxation principles are harmonised across the EAC. The consultant has not been involved in this. The new system is expected to harmonise tax systems and tax compliance rules across the EAC.


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5. Institutional Issues

5.1 Introduction

Depending on the differentiation required between policy determination and industry regulation, the Government needs to decide which functions would remain with the Government and which should be delegated to the Petroleum Special Unit or an Energy Regulator (i.e. RURA, the Rwanda Utilities Regulation Authority).

In an ideal world, one of the indirect benefits of establishing a Petroleum Special Unit or delegating supervisory oversight to a Regulator is to be able to centralise various functions that are presently dispersed amongst other Governmental Ministries and Agencies. For the reasons given below, it is assumed that the PSU will assume all the duties of regulatory oversight over the petroleum sector (other than possibly the regulation of filling stations and certain technical oversight roles) rather than let this pass to a fledgling regulator with no experience of the petroleum sector.

In considering the structure of the industry, it is first necessary to aim for separate levels of authority and management responsibility in the public sector. The Government and Ministerial Agencies should retain responsibility for certain key policy functions. The Regulator on the other hand should have exclusive powers on more day-to-day and detailed matters, so as to be able to set and control the procedures under which the oil companies compete and perform their commercial and operational functions.

However one of the problems in Rwanda is that two well established Ministries presently have responsibility for overseeing different aspects over the petroleum sector: the Ministry of Infrastructure, MININFRA, which has developed the skills to manage large projects and the Ministry of Commerce, Industry, Investment Promotion, Tourism and Cooperatives (MINICOM), which serves a more commercial role, issues trade licences and in which the Petroleum Special Unit (PSU) currently resides. While this rather artificial division may erode over time as the government structure evolves, there is inevitably a shortage of the critical skills in Rwanda due to its history and position in the development cycle; and the roles of these major Ministries cannot be changed to suit just one sector, petroleum. In addition to MININFRA and MINICOM, REMA has a specific remit under the law to promote environmental protection and biodiversity and RBS to promote standards. Both of these governmental level agencies have a necessary and crucial role to play in petroleum. The role of RURA is discussed further below. Other agencies also play a part, particularly the Rwanda Revue Authority.

In addition it is very common for local authorities to take on the role of licensing of retail filling stations, as part of their role in overseeing planning development and the application of building regulations. Centralising this has been tried in other countries but almost always some form of decentralisation is found to work best. As part of the planning process most countries require there to be a “need assessment” for the development and for premises handling potentially dangerous substances like petroleum, compliance with rigorous technical standards need to be ensured and also a simple environmental impact assessment must be carried out. In addition most countries require testing of road fuels to ensure that there is no adulteration and calibration of meters. Sometimes this role is centralised but quite often it is delegated to the local authorities, which would work with the equivalent of REMA and RBS. Rwanda is quiet advanced in tracking product movements from the border into sites electronically and has a rigorous system of applying seals to tanks and valves at sites. This is an aspect of tax and duty compliance that is run by the RRA.

This means that it is difficult to set up a “one stop shop” to regulate an area as complex as petroleum. This is the case in almost all other countries.


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5.2 MININFRA and MINICOM Roles

It may be helpful to explain the general roles of both key Ministries and then to examine their roles in the petroleum sector.

MININFRA

The principle responsibilities of MININFRA are:

a) To develop institutional and legal frameworks, national policies, strategies and master plans relating to transport, energy, habitat and urbanism, meteorology, and water and sanitation subsectors;

b) To initiate programmes to develop, rehabilitate and maintain an efficient and integrated national transport infrastructure network, including roads, bridges, airports, railways, and water transportation which will contribute towards economic development and regional integration;

c) To initiate, develop and maintain sustainable power generation facilities to supply clean, cost-effective and uninterrupted energy for the country and the region;

d) To initiate, develop and facilitate urban development programmes with a view to providing affordable shelter with due regard to adequate water and sanitation facilities for the population and promote grouped settlement (Imidugudu);

e) To initiate programmes aimed at increasing access to affordable energy, water and sanitation, and transport infrastructure and related services for the population;

f) To develop a customer focused meteorological service to deliver accurate and timely weather and climatological information to government and private institutions;

g) To ensure that the development of policies and strategies concerning national infrastructure are in line with regional integration and harmonisation policies with the EAC;

h) To supervise the implementation of quality standards and norms, cost effectiveness, response to environmental sustainability, safety and cross-cutting issues in infrastructure development;

i) To work towards implementation of programmes to enhance human resource capacities under the transport, energy, habitat & urbanism, water and sanitation, and meteorology sub-sectors respectively;

j) To supervise activities meant to elaborate, monitor and assess the implementation of national policies and programmes on matters relating to habitat and urbanism, transport, energy, water and sanitation and meteorology;

k) To support and supervise infrastructure development programmes under the decentralised structures under the respective sub-sectors as per the District Development Programmes in each district;

l) To facilitate, promote and engage the private sector to invest in infrastructure;

m) To orient and supervise the functioning and management of public institutions and agencies under the Ministry of Infrastructure including existing agencies such as the Road Maintenance Fund (RMF), Office National des Transports en Commune (ONATRACOM), Rwandan Civil Aviation Authority (RCAA), ELECTROGAZ and other agencies to be formed under its sub-sectors;

n) To supervise actions to mobilise resources and partnerships in the area of infrastructure and mobilise resources for MININFRA programmes.


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The main role of MININFRA in the petroleum sector is to oversee major infrastructure projects, such as new pipelines or storage facilities or the refurbishment of existing facilities where this requires anything more than minor contracts. As such its role in petroleum on a day-to-day basis is limited but construction approvals and licences to operate fall naturally under its remit. It is also promoting the more widespread uptake of LPG and the establishment of uniform standards.

MINICOM

The Ministry of Commerce, Industry, Investment Promotion, Tourism and Cooperatives (MINICOM) is responsible for:

a) Supervision of all activities related to elaboration, monitoring and evaluation of national policies and programs as regards commerce, industry, tourism, investment promotion and cooperatives;

b) Supervision of all activities related to elaboration, monitoring and evaluation of national policies and programs as regards commerce, industry, tourism, investment promotion and cooperatives;

c) Initiating national strategies for protection of consumers;

d) Developing of management systems for the quality of products;

e) Initiating and management of the process of regional economic integration for Rwanda and conducting regional, international and multilateral commercial negotiations;

f) Supervision of concepts and updating of Investment Code;

g) Orientation and supervision of functioning of public agencies under the ministry;

h) Supervision of partnership and resources mobilization for the sectors of commerce, industry, investment promotion, tourism and cooperatives.

MINICOM has the following specific functions in relation to the petroleum sector (which we have set up in the draft Petroleum Law):

(a) To initiate legislation and make the necessary regulations in order to support and promote a continuous, secure and adequate supply of petroleum products at competitive cost for all consumers and to create favourable conditions for the availability of adequate import, transport, storage and distribution facilities within or, if necessary, outside Rwanda;

(b) To promote the increase of opportunities for regional petroleum trade and encourage a diversity of supply sources, routes and means of transportation;

(c) To approve the Emergency Petroleum Supply Plan prepared by the Petroleum Special Unit;

(d) To ensure the establishment, maintenance and periodic updates of the National Petroleum Information System and the evaluation and dissemination of the information derived from the National Petroleum Information System;

(f) To issue regulations to ensure overall regulatory oversight of the petroleum sector.


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5.3 PSU Roles, Goals and Staffing

The Petroleum Special Unit, currently a division of MINICOM, was established by the Cabinet in 2006. It has the following specific functions-

(a) To provide technical advice to the Ministry in all legislative and regulatory matters concerning petroleum supply operations;

(b) To monitor and provide feedback to the Ministry on the effectiveness and equitability of the licensing system for petroleum supply operations and installations in accordance with the draft Petroleum Law;

(c) To organise, implement and co-ordinate with other Government agencies the monitoring process of the operations, installations and participants in the supply chain, including domestic and international market prices, in accordance with the Petroleum Law;

(d) To encourage, monitor and enforce the implementation of, and the observance of the principles of the free market and fair competition in co-ordination with other Government agencies in accordance with the Petroleum Law;

(e) To manage national strategic petroleum stocks on behalf on the Government;

(f) To monitor compliance with industry’s obligations to maintain adequate working stocks in accordance with the Petroleum Law; and

(g) To perform such other functions as may be conferred or imposed upon it by MINICOM.

The full staff complement (5) should be achieved as soon as possible.

It is crucial that urgent attention is given to human capacity building in PSU. The Consultant reviewed some of the proposed international training courses, which seemed satisfactory, although one of the courses was aimed more at upstream fiscal systems. However some more exposure to oil company practices would be immensely beneficial and one means of achieving this is to work through the Institutes of Petroleum (industry based organisations) in other countries as direct secondments of Ministry officials to oil companies is not as common as it used to be. The Consultant prepared a list of such Institutes and contact points in the report on the fourth mission.

An HR needs and training assessment be carried out once the roles, goals and function of the PSU become clearer. From the above discussion it is clear that there is potential for the unit to take on many other functions and this will need more staffing. As things stand, the Consultant’s impression is that the unit is barely coping with day-to-day duties. It would be facile to suggest that some of these “fire-fighting” roles are unnecessary, as the petroleum sector inevitably has limited skills and resources and there is nobody else to do these things. The Consultant has already been provided with full CVs and job specifications (Ref. 13) for the near future. The job and people specifications are sensible and appropriate and that a staff complement of 4 or 5 people is needed even if the role does not expand.

Available skills and resources should be used to greatest effect given the number and complexity of the issues facing Rwanda’s oil and oil industry. There will inevitably be a shortage of officials who have the relevant expertise and priority should be given to professional development.

The question of independence of the PSU will become an important issue in the course of time. While in the short term having the PSU act with the authority of the Government may be an advantage, especially given the limited staffing arrangements, continued Governmental interference and the reality of any major decision having to be sent for Governmental approval will undermine the authority of the Regulator. The plan should be for the PSU to become a separate government-level agency


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Providing part of the funding for the PSU from industry levies or the fees for licences would increase its independence from the Government. It would also create additional incentives for performance.

5.4 Further Development of Duties and Powers of PSU

Supply Conditions

The PSU should have the powers to ensure that commercial, contractual and technical supply conditions for oil are appropriate and are non-discriminatory.

Safety, Technical and Environment

The PSU has an important role to play in respect of first line responsibility for setting and policing these standards, although the standards themselves may be determined by the Government or international practice.

As soon as possible it is important to set up:

• A National Safety Body for the petroleum sector (RBS could fulfil this role)

• A national laboratory for testing petroleum fuels (again, this falls to RBS)

• A Trading Standards Body to include trained inspectors in trading standards also weights & measures for the petroleum sector (this should be organised by RBS with the local authorities).

• Petroleum Licensing Authority - which will also include trained & qualified inspectors for licensing petrol filling stations (it is envisaged that this role will fall t the local authorities as they have responsibility for planning development).

It is possible that one or more of these roles could be combined in the same organisation, at least initially

Enforcement

Effective and timely enforcement is an essential part of effective regulation. This will require two distinct types of provisions:

• powers to monitor compliance;

• effective penalties in the event of non-compliance.

Regulated companies have been known to weigh up the costs of complying with regulation and the expectation or otherwise of sanctions. Enforcement will be a particularly important aspect to consider in Rwanda. The level of penalties by way of fines (expressed for example in terms of a (large) multiple of the average wage for various infringements, or some other method based on real costs, so that the penalties will be automatically adjusted for inflation) or revoking of licences needs to be clearly set out in a public document; and also the circumstances under which licences may be suspended or revoked. The draft Petroleum Law may be the best vehicle for this. Who should impose/ collect such penalties and how they are written into law requires careful thought.


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The Rwanda Bureau of Standards will also require a specialised inspectorate to ensure compliance, along with resources in Municipalities (for example in deciding on the renewal or granting of licences for filling stations).

5.5 RURA

RURA is the Rwanda Utility Regulation Agency, which was established by Law No 39/2001 of 13/09/2001. It is a fairly new body with limited institutional capability. It reports in to the President’s Office, which is a strong signal of intent as to how important its role will become in future.

The following comments are taken from the recommendations of the governance project undertaken by another team of Adam Smith International (ASI) (Ref. 14).

a) “During a retreat in late 2007, RURA devised a radical new structure which sought to

address the medium term requirements of the agency.

b) The scope of RURA’s functions are very far reaching and will become more so, as other sector legislation is finalised, other competitors enter the market, and new technologies, sources of energy and transport become available.

c) RURA was set up with a view to the agency being independent, but arguably it would be more independent if key posts such as the Managing Director and Board members were filled on the basis of competition.

d) The agency and its Regulatory Board in particular have very wide-ranging powers.

e) RURA is still at an early stage of development. Key sectoral legislation is not yet in place (apart from in ICT); over half the staff envisaged have yet to be hired. It is therefore not yet well positioned to fully execute its functions.

f) There does not appear to be any duplication of functions between RURA and any other agency, with the possible exception of RITA.”

Key recommendations of the ASI project on governance in relation to RURA were:

a) “RURA should reinforce its independence by filling key posts such as the Managing Director and Board members on the basis of competition rather than appointment.

b) RURA should maintains its functions and structures as proposed in the 2007 re-structuring exercise for at least 2-4 years, to allow the new structure to embed and for cross-fertilisation across sectors and between sectors and cross-cutting directorates to take place as envisaged.

c) Summary: RURA is clearly an essential agency, justified on the grounds of strategic criteria, the need for independence and accessibility (although for the latter two points, there are concerns that the agency does not achieve these criteria in practice). The Agency is in early stages of development, but has devised a structure with a sound strategic basis and is currently recruiting staff. Some progress has been made especially in ICT where a sectoral law is in place, but performance appears to be undermined by few major operators and high mobile phone costs compared to the region. A more open working culture (delegated responsibility, team work) is urged, to enable the Agency to act and be seen to act as an impartial, accessibly and transparent regulator (which it aspires to in its stated values). A competitive process for hiring key staff (Director General and the Board) would make RURA more independent. Specific capacity building to enhance mediation, facilitation, communication and brokering skills are recommended.


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d) Provide capacity building for RURA staff on how to

a. set up and broker partnerships (especially for the UAF),

b. mediate justly between competing stakeholder interests and

c. facilitate consultation exercises in which stakeholders feel RURA has acted impartially and either their views are accommodated or they are informed why if not.”

The draft Petroleum Law envisages that as and when the full mechanisms economic regulation are required in the petroleum sector then by Ministerial Decree, RURA will start to play an increasingly important role. However with the present ad hoc pricing arrangements set by Ministerial intervention and no natural monopoly elements such as pipelines or new third party storage facilities to which all players need regulated access, it would be counterproductive for RURA to become involved immediately.

The role of RURA in respect of gas and electricity can be found in the final draft Gas and Electricity Laws (Refs. 15 and 16).

5.6 Other Agencies

In parallel with (i) the roles of the principal Ministries and (ii) the separate tier of regulatory oversight to be provided by the PSU and eventually RURA, there are the governmental level agencies including RBS, RRA and REMA who have vital parts to play in ensuring their specialist aspects of national policy are properly carried out efficiently by industry.

One particular institutional problem for Rwanda is that the RBS is very much in need of capacity building and urgently needs funds not only to buy test equipment and train a cadre of inspectors to assist MINICOM, MININFRA and the local authorities to ensure safe practices, in parallel with its initiatives that are yet to bear fruit to introduce standards for the petroleum and LPG sectors.

At present there is no anti-monopoly body or Competition Commission as it is called in other countries. A draft law exists aimed at establishing the functions that such a body would carry out (Ref. 18).


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6. Petroleum Legislation/ Regulation

6.1 Draft Petroleum Law

The first consideration in any new downstream petroleum law is to discuss and agree on the principal roles of the Ministry and the regulatory body. There was extensive debate with the PSU on this and the resulting proposed roles and responsibilities are described in the previous Chapter.

The next issue is to design what sort of body or unit is to carry out the regulatory roles under the aegis of the Government. The pros and cons of having an Energy Regulator like RURA carry out these functions rather than the PSU were also discussed in the previous Chapter. In support of the recommendation to leave the supervisory responsibilities for the petroleum sector with the PSU we cite a report by a UK consulting company, ECA, acting under GTZ funding, this suggested that all monitoring and price control responsibility for petroleum products except LPG remain with the Petroleum Special Unit for the time being, given the special needs and significance of petroleum (Ref. 17).

Another compelling argument is that the PSU also acts as a governmental level agency to manage the government’s oil stocks. Chapter 9 describes international practices in this area and explains why there is a special provision for managing oil stocks in the draft Petroleum Law.

6.2 EAC Legislation and Regulations

Over the period January to March 2009 the Consultant collected the relevant petroleum legislation from Kenya and Uganda (Refs. 19 and 20), in order to provide a basis for proposals for analogous legislation/ regulations for Rwanda. The Energy Law of the Republic of South Africa was also reviewed (Ref. 26).

The downstream energy legislation in Kenya and RSA is based on setting up an Energy Regulator. While the trajectory of the petroleum sector in Rwanda may well generate a future role like this for the embryonic Rwanda Utilities Regulatory Authority, the primary responsibility for overview of the petroleum system should remain with Petroleum Special Unit at least for the foreseeable future, due to the skills required, the wider policy issues it handles and its role in maintaining government oil stocks. Moving the stocking role to another agency without petroleum sector exposure would involve considerable cost and risk.

6.3 Licences

The next consideration is how to monitor and control the industry in a sufficiently light-handed way so as not to interfere unduly, while ensuring that adequate incentives continue to be maintained to ensure continuity of supplies at competitive prices, using acceptable and safe practices. The two methods generally chosen are licensing to set the basic conditions for new entrants and how players operate individually and legislation/ regulation to set the rules collectively. The following sections deal with licensing.

Licences to import or export petroleum fuel products are not in general required in many countries because there are strict procedures for controlling the movements of hydrocarbons, usually connected with tax identification of movements for fiscal compliance.

In Rwanda it is vital to make sure that only legal competition occurs and that imports are properly monitored. The November 2006 High Level Task Force report (Ref. 2) concluded that, “Imports of petroleum products are governed by the external trade law, the customs law and the trade license regulations. Importing companies must be registered with trading license and must


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also possess a Tax Identification Number (TIN). They are expected to comply with international trade conditions required in countries of transit.” The RRA has made huge strides to set up electronic tracking systems that verify each movement of oil products entering the country do so only at approved border points and that the same volumes reach the depots. However the PSU consider that additional licences would add to the controls and make sure that only bona fide players can become party to the oil market. The Consultant accepts the Government’s view that it is necessary to develop a system of licences for import, retailing and distribution and proposals are included in the draft Petroleum Act.

In tandem with operating licences there also needs to be a strict system of approvals for new storage and retail sites to ensure compliance with environmental, technical and building regulations, access to highways etc (which are considered further below). Some western countries also have decentralised licensing systems for retail sites, for example, in the UK there are LACOST (“Local Authority Trading Standards”) type licences, which apply primarily to the labelling and quality of fuels. An appropriate system for setting fuel quality standards and maintaining them needs to be developed for Rwanda.

The procedures for applying for licences and the proposed duration of those licences, procedures for revocation of licences and rights of appeal are set out in the draft Petroleum Law in Appendix D.

6.4 Technical Committee

The proposed Petroleum Law differentiates between policy-making roles that remain with the Government and specific licensing and permitting roles that can be devolved to other bodies.

Early versions of the draft Petroleum Law proposed using a Technical Committee comprising stakeholders from Government and Industry to assist with policy development, monitoring and dispute resolution, reporting to the PSU, akin to the way such a Committee advises the Ministry in Uganda. A considerable amount of effort went into devising voting rights, rights of nomination, appointment and dismissal, who appoints the Chairman and the Secretary, etc. However after reviewing these proposals, the Management Committee of MINICOM preferred to play down the role of any such Committee and in particular not to write in the Law that it reported to the PSU. This makes sense as plans to separate PSU from MINICOM are not finalised.

6.5 Competent Authorities for Petroleum

An issue highlighted by MININFRA is that the present draft Petroleum Law does not assign all oversight duties to a single body. MININFRA’s lawyers called for a more streamlined system but as explained in the previous Chapter this presents considerable difficulties. The diverse aspects of petroleum require a more complex institutional solution, so the wish of MININFRA is difficult to realise. For example it would be clumsy and unnecessary to over-ride the present planning laws that delegate control to local authorities in order to revert to a quasi-colonial system where a central Ministry, whether MINICOM or MININFRA, must by law be the licensor and regulator for all the hundreds of filling stations in the country. MININFRA simply does not have the capability.

It is also important to realise that the draft Law has also been written to avoid setting the PSU up as a regulator in a conventional sense, as it carries out oil stocking functions and generally acts as an advisory, monitoring and policy assistance unit for the Minister.

Every country has its own regulatory system that is a result of historical accident and design. All countries except perhaps those with highly centralised governmental structures such as FSU countries and Saudi Arabia have a wide variety of institutions responsible for the different aspects


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of petroleum, for example there are usually quite distinct bodies responsible for the oversight of central oil stocks, licensing of oil terminals and pipelines, HSE aspects, licensing filling stations and fuel quality testing and regulation.

Rev 8 of the draft Petroleum Law for Rwanda developed by the Consultant contained the following simple provisions for the appropriate body to issue and oversee licences. The Minister preferred to leave these proposals for discussion with stakeholders and for promulgation by Decree and the draft in Appendix C is silent on this. The provisions suggested below reflect how the present systems work in Rwanda – it would only be possible to streamline this by modifying the roles of powerful Ministries like MININFRA and MINICOM, or by delegating most of the regulatory powers to the PSU or RURA, which in discussion appeared to go beyond the comfort zone of the Government, at least for the time being.

1. MINICOM will be responsible for the approval and oversight of:

• licences to import petroleum products;

• the operation of any future petroleum pipelines, bulk storage depots, LPG filling stations or storage for LPG in quantities greater than 80 kg; and

• in the case that negotiated access to third party facilities is deemed by MINICOM not to be operating satisfactorily in terms of efficiency in the market, or other monopoly elements of the supply chain require additional economic regulation, or further measures are in his or her view necessary to ensure consumer protection or to improve efficiency of the market, then the Competent Authority for that element of the supply chain may be delegated by Ministerial Decree to be the Rwanda Utilities Regulation Agency.

(Note: It is conceivable that MININFRA may wish to regulate the operation of large petroleum or LPG facilities rather than the MINICOM but if it does, it should use the PSU in the roles set out in the draft Petroleum Law)

2. The Local Authority will be responsible for the approval and oversight of:

• permits to construct and licences to operate retail petroleum filling stations;

• construction or operation of storage or use of LPG in quantities of less than 80 kg (80 kg is an arbitrary number and needs to be agreed by RBS); and

• arranging for the parking of petroleum or LPG road vehicles near storage depots or other places where petroleum or LPG road vehicles converge.

3. The Ministry of Infrastructure will be responsible for the approval and oversight of:

• the permitting and construction of petroleum pipelines, bulk storage depots, LPG filling stations or storage for LPG in quantities greater than 80 kg.

(Note: RURA expressed a wish to take on these two regulatory functions rather than MININFRA. We met Eng Alfred D Byigero, Director of Gas and Mr Jean Baptiste Bwanakeye, Director of Electricity)

4. The Rwanda Utilities Regulation Agency will responsible for the oversight of:

• the pricing and regulation of the LPG market and the system for the exchange of cylinders.

The line Ministry responsible for oversight of the Petroleum Law is referred to as the Ministry, not MINICOM, to cater for any subsequent governmental restructuring.


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6.6 Introduction

The first step was to identify and collect the petroleum legislation from Kenya and Uganda, which provided a basis for proposals for Rwanda. There was also the Energy Law from South Africa (RSA) to review. There are however major institutional differences between these countries and Rwanda (for example there is a Factories Acts in Kenya that has no equivalent in Rwanda, as the Kenyan system was modelled on the British approach, whereas part of the Rwandan legal system is essentially drawn from Belgian and French approaches in colonial days. The British Factories Act became the Health and safety at Work Act and is a model for the English-speaking world).

A cursory glance at the new energy legislation in Kenya and RSA shows that that it is based around setting up an Energy Regulator. This is not the approach favoured in Rwanda for the time being, at least in the petroleum sector.

One of the other key issues is what type of penalties should be set for infringing the law and how fines should be extracted. This is always a problem when framing energy legislation. Although penalties suggested by the Director of the PSU and the Consultant were pencilled in to the draft text, these are for the Ministry of Justice and stakeholders to review further. It was decided to leave the actual collection of penalties as a matter for the courts to administer, partly because some serious infringements will require custodial sentences. This does not follow the system of penalties used by the RRA, but the RRA has been set up to have secure systems for the collection of duties and taxes. It is believed to be similar to the system proposed for use by RURA.

6.7 Licences

Licences to import fuel products are not in general required in many countries because there are strict procedures for controlling the movements of hydrocarbons, usually connected with the fiscal system. In Rwanda it is vital to make sure that only legal competition occurs and that imports are properly monitored, also to avoid “briefcase” companies. The RRA has instituted a system for tracking movements and now applies a well-designed system of Tax Unique Reference Numbers for each operation.

The specific recommendations of the High Level Task Force (Ref. 2) on the Petroleum Sector were:

“Incorporation and registration of companies and individual businesses should be different. There should be a legal authority charged with incorporation of companies. Incorporation and issuance of trading license should be differentiated. Registration should be centralized to avoid double registration or registration of a single name by more than one individual as is the case presently. (Amend law No. 36/91)

Based on law No.22/1989, the Minister responsible for Trade should put in place all required instructions for the proper implementation of this law. The team recently set up that will work on all commercial related laws should take it up.

Trading License should be specific to the type of activity to be carried out e.g. retailer, distributors/transporters, wholesale or exporters. All Licenses should be issued by the Ministry of commerce for proper coordination but the Ministry of Energy should be informed from time to time. (Amend law No.36/91)

Require companies operating in the petroleum industry for tax default, history of mismanagement and corruption clearance before a firm/individual is incorporated as a business operator in Rwanda. (Amend law No.36/91). For foreign firms, clearance from the country of origin would serve the same purpose. This will deter briefcase firms as has been noticed in the past.


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Start petroleum import clearance at the entry point (borders). This is proposed in order to free space at the current depot storage facilities.

Rwanda Revenue Authority to set up mechanism for faster clearance at border.”

That team separately noted that another law that affects the importation/trade of petroleum product is Law No. 22/1989 of 23rd December 1989 as modified to date which concerns external trade. In its various clauses, especially Article 3 & 4 the law calls for establishment of a body charged with handling of trade issues both within and from outside. This has not been put in place.

Some initial suggestions based on the above high-level comments are given below, although the consultant has not yet had sight of the 22/1989 Law.

The November 2006 High Level Task Force report added that,

“Imports of petroleum products are governed by the external trade law, the customs law and the trade license regulations. Importing companies must be registered with trading license and must also possess a Tax Identification Number (TIN). They are expected to comply with international trade conditions required in countries of transit.”

The conclusion is that there needs to be a strict system of approvals for new storage and retail sites to ensure compliance with environmental, technical and building regulations, access to highways etc (which are considered further below). It is also necessary to develop a system of permits (construction) and licences (operations) for import, retailing and possibly distribution. This has been built into the draft Petroleum Law and found favour at all levels in MINICOM up to the Minister. Industry is concerned that the licences are not too short but otherwise accepts this need.

6.8 Import Licence Issues

6.8.1 General Considerations

The indirect taxation collection system depends critically on identification and targeting of the importers (rather than retailers or distributors). From the point of view of revenue collection sorting out the import licences is a more important priority than solving the question of the retail licences, despite the high visibility of poorly located, inefficient and potentially unsafe filling stations.

The aim of the licence is not to set volume limitations for importers, but to ensure that companies involved in the import of oil products are bona fide. Possible criteria to be reviewed by the authorities for any application for an import licence include:

• Having supply contracts in place

• Having access to physical assets e.g. storage (at retail sites)

• Access to a distribution system e.g. trucks (though these need not be the importer’s own)

• Ability to finance for say 30 days

Any criminal record should be grounds for losing a licence. This however raises many issues. Is suspicion by the authorities sufficient grounds and what standards of proof apply? Does this refer


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to criminal activity by an individual or by a company? What happens about criminal activity in a non-connected activity? E.g. money laundering could be argued to be non-connected? How criminal – e.g. would late payment of VAT that incurs normal penalties be a crime – but this may be a genuine paperwork oversight?

It is quite normal to stipulate that any licence holder must either work with or be a company registered in that country.

It must be recognised that licences per se cannot affect the way companies operate or interact.

The above criteria would

• ensure that imports take place by and large using safe trucks that are fit for purpose

• avoid giving licences to companies or Directors who are known to have a poor record of tax compliance maintaining licences

• avoid licences being sold, with the law stating explicitly that licences cannot be sold on to a third party, and

• when linked to QA/ audits etc., a strict system of licences will help solve any future quality problems (as importers will stand to lose their licences if they persistently infringe local standards) .

If a holder of an import licence does not trade or makes a loss (i.e. too many licences are issued), this is not a problem. The market will take care of this. The authorities should not appear to be restrictive on any true importer.

There is no need to specify a limit to the volumes allowed in the licences.

Licences should not simply be awarded to individual applicants from within the country – this could perpetuate the “behind closed doors” perceptions.

6.9 Form of Import Licence

Import licences are not common documents and they are valuable to the holder. They can be in many formats including cards. The licence should however contain:

• the issuing authority name and signature/logo, whatever, to stand out and difficult to

falsify.

• the holder’s name etc.

• the period of validity

• description of the imported goods, and transportation methods that it will cover.

• an identification number unique to the holder (for example the one linked to the custom reference number).

6.10 Import Documentation

Customs have decided to follow some sort of a computerised entry processing system following the declaration. It is a simplified version of the “SAD”, the Single Administrative Document, which is the standard being used in the EU. This is common practice inside the EU region facilitating thorough checks on the duty/tax status of product.


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The RRA has developed electronic systems to track movements that are compatible with the licences proposed in the draft Petroleum Law. In turn the Petroleum Law should help tighten the tax compliance system further.

The RRA’s Law on Consumption Tax for Imported Goods (see Ref. 25) has also been taken into account when designing the licences.

6.11 Retail Licences

Similar considerations apply to the criteria for awarding retail licences, assuming that the construction meets building regulations and the operation is run in a safe manner with no ecological damage (e.g. no products damaging local watercourses):

• Contracts in place (of some sort, even if very short term, to establish bona fide credentials as a petroleum retailer)

• Maintaining quality

Any criminal record should be grounds for losing a licence.

For licensing of existing sites, there should perhaps be a criterion that the company has been trading for three or six months and has been paying taxes, to establish a credible track record as a retailer.

If any duty is to be paid further downstream e.g. at retail sites (which would impose burdens on the RRA) – not the current system, where the initial storage is bonded and duty becomes payable when oil leaves the storage site – it is suggested that the RRA uses a system of seals to determine volumes and compliance with tax regulations for sites that are “suspect”. The RRA would need to work closely with the PSU on these matters. It is not advocated that the system be changed.

The PSU should try to avoid a direct or larger licensing role for petrol stations. If too few stations are authorised, then the PSU could be accused of restricting the market, putting prices up or favouring incumbents. If too many are authorised then the FSB could look foolish (a) even if it is generally understood that the market will take care of inefficiencies by closing down a large of filling stations and (b) because some of the superfluous stations could be linked to criminal activities of which the authorities are unaware.

Instead it would be preferable for the authorities to take a policy or overseeing role and for the primary Petroleum Licensing Authority (PLA) to be delegated to whichever local government function deals with conventional planning consents for other types of buildings, alongside a consent process from whatever body is to look after safety and environmental issues (equivalent to the UK HSE) in the government structure.

The draft Petroleum Law is directed towards ratifying the use of local authorities to issue and manage filling station licences.

6.12 Distribution Licences

A hybrid of the basic import licence or retail licences should suffice and that there is no need to develop any distribution licences with different administrative machinery.


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6.13 Additional Regulations

In addition to any primary law, it will be necessary to issue a suit of implementing regulations. As the draft Petroleum Law stands (see Appendix C), a Decree will needed to designate what Competent Authorities are responsible for which permits and licences.

If the PSU splits from MINICOM (and possibly if it does not), it may be advisable to establish a “petroleum fee” on the industry for the holding or sale of the National Strategic Stocks; in which case the regulations could provide for -

(a) a fee to be charged for the storage of such petroleum products;

(b) the amount of the fee to be prescribed by the Ministry; and

(c) for the fee to be collected monthly by the Petroleum Special Unit and to be paid into the Consolidated Fund at the Bank of Rwanda.

Other regulations that can be foreseen to be needed include:

a. Providing for forms and fees or charges to be made or changed under the Petroleum Law;

b. Prescribing in respect of any contravention of the regulations changes to penalties, including a requirement that the Court convicting a person of an offence under the regulations may order the forfeiture to the state of anything involved in the commission of the offence.

c. Providing for the introduction of regulations to conform with practices in the EAC.

d. providing for importation, transportation, storage, wholesale and retail of petroleum products and prescribing changes to the system of licensing for the purposes aforesaid, the manner in which such licences shall be made, the conditions of the licence, the authorities which may grant such licences, the fees which may be charged and any other matters incidental thereto;

e. defining the types of petroleum products to which regulations shall apply, and dividing petroleum into classes categories and making different provisions with regard to such classes or categories;

f. providing for exemption to the armed forces from the requirement of licenses if need be;

g. providing for maintenance of minimum operational stocks of petroleum and procedures thereof;

h. providing for the mode of sales, metering, documentation and display of prices of petroleum in retail dispensing sites and depots;

i. providing for environmental, health and safety standards associated with the handling, storage and use of petroleum;

j. providing for the delivery to an officer as may be specified of samples of petroleum imported into the country or intended to be imported and for the testing of such samples;

k. providing for the type and location of the premises in respect of which licenses to posses petroleum may be granted, the inspection of premises so licensed and the taking of samples and the testing of petroleum found thereon;

l. governing the design and construction of vehicles to be used in the transportation of petroleum;


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m. prohibiting or restricting the carriage of goods and passengers in vehicles carrying petroleum;

n. prescribing the quantity of petroleum that may be conveyed in any one vehicle;

o. prescribing the precautions to be observed in the transportation of petroleum, in the manner of packing and the mode and time of transit and in the loading and unloading of vehicles used for such transportation;

p. in consultation with the body responsible for standards, appointing inspectors and agents for the testing and examination of petroleum and prescribing their powers and duties;

q. prescribing the marking of fuels and categories of the petroleum for which such markings shall be carried out;

r. prescribing for the provision of petroleum statistics and information to the relevant institutions;

s. providing for the development and coordination of a national oil spill response plan including measures to prevent oil spills and a mechanism for compensation in the event of an oil spill;

t. determining the retail prices of petroleum and petroleum products if the Ministry deems it appropriate, or for setting up formal procedures for economic regulation of the industry.

6.14 Initial Consultations

Discussions with stakeholders started on 15th October 2009 to smooth the way and develop transitional solutions where necessary. The government should be sensitive to any feedback received and not impose the draft Law unilaterally.


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7. Stabilising the Price of Oil Products

7.1 Pricing

The prices of gasoline and diesel at the pump net or tax and duty are higher than in many other countries due to the high costs of transportation and the relatively small volumes being purchased.

The Government perceives that it has at least two levers to monitor and then manage these prices:

• Control prices

• Purchase supplies in bulk to exert economies of scale over both purchases and logistics of supply.

This section deals with both policy issues as the Government considers them to be interlinked.

7.2 Pricing Policy

The High Level Task Force (Ref. 2) reported that:

“MINICOM together with other stakeholders that include MINECOFIN, MININFRA and the RRA has a committee that monitors the prices of petroleum products on a monthly basis. Petroleum products are purchased from the Kenyan / Tanzanian refineries or markets by the private sector dealers. This is also done independently – there is no co-operation. The volatility of international petroleum products prices and local prices makes the products price beyond the control of local authorities. Furthermore, the Rwandan dealers go through middle men who have to get a commission—an act of which renders the final CIF Kigali higher.”

The Pricing Committee sets prices for transport fuels each month, across the country (a typical spreadsheet used at the committee is given in Ref. 6). However while international oil prices have been soaring, it has done this by deciding to forego tax and duty revenues rather than controlling the net returns to operators, if it considers that the gross prices are excessive. This means that it is difficult for the Ministry of Finance to plan its revenues and it also places little incentive on industry players to control their prices. There is no sharing of the economic rent with the industry. Retailers do not compete on price.

The unwritten policy is to try to start phasing these subsidies out; this features in the draft Petroleum Policy, where a significant reduction in subsidy is perceived to be beneficial but a complete move away from subsidies is seen to be politically awkward/ infeasible in the short term.

The multiplier arguments for petroleum subsidies are probably flawed and certainly require deeper investigation. Essentially, the Rwandan government is operating under a budget constraint. Its expenditure is limited by

(i) its tax revenues;

(ii) aid inflows; and

(iii) borrowing limits.

Higher subsidies on petrol and diesel (unless offset by higher taxes) mean less government spending on other things - like schools, hospitals, roads etc. Also most of the direct benefit will


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go to rich car owners and middle-income lorry drivers, shop and stall keepers and hardly any to subsistence farmers who operate in the non-traded goods barter economy.

To the extent that real activity multiplier effects exist, they are likely to be significantly larger for more schools and hospitals - and larger still for more teachers and nurses.

If the subsidies are financed by higher debt, it imposes costs on future Rwandans e.g. by raising interest rates. Large net subsidies will also threaten higher (general) inflation depreciation of the exchange rate.

If reducing or at least curtailing the increase in end user oil prices is seen as a valid objective then one possibility is to introduce a tighter pricing control system and perhaps one that uses a pre-agreed formula rather than an ad-hoc determination each month than has a high degree of subjectivity built in.

Maximum prices in principle protect consumers against inefficient dominant company behaviour. Minimum prices protect against predatory pricing behaviour. However there is also the possibility in some circumstances of minimum pricing formulae being used (with great care) if some companies are not fully meeting their fiscal obligations. Equally, there is potential for increase in prices if maximum price regulation is introduced if there is imperfect competition (as happened in France).

Would outside investors be encouraged or discouraged by economic regulation? Whatever system is in place needs to be evenhanded, transparent and fair and that provided the rules are clear, greater certainty can encourage investment.

7.3 Bulk Purchasing

There is a perception in PSU that the Consultant supports that importers are not competing very strongly against one another. Volumes are comparatively small and players have grown complacent. Transportation tariffs on the Kenya pipeline are quite high and no advantage has been taken of any bulk purchasing power to force either these prices or the costs of trucking across Uganda down. Equally buying comparatively small packets of oil on the open market also does not take advantage of any leverage from the total volumes involved.

Under these circumstances it is natural to ask whether a better system can be organised. This was posed in the High Level Task Force in November 2006 (Ref. 2):

“There is really a lot of cost incurred by the petrol dealers that could be minimized if purchase was done in bulk quantities. The cost of using the pipeline from Mombasa to either Eldoret or Kisumu is high. There are actually certain quantities that one has to have through the pipeline otherwise one buys from those with stocks at either Eldoret or Kisumu and no other choice. So this means that there is no competitive leverage to Rwandan dealers especially that they are scattered, they buy in small quantities, and so on.

The above aspect of product sourcing, and the volatility in international market prices plus other bureaucratic and administrative costs makes the local price in Rwanda very high. This is why government should consider the following recommendations:

Organize all the dealers to buy in bulk and then facilitate them in accessing foreign exchange;

Government could consider taking up this and then sale to the private sector. This would however require the private sector to plan their purchases upfront, communicate it to government and then pay related funds;


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Government may consider renting space for products destined to Rwanda with the Kenya pipeline Authority and the Authority in charge of the depots at either Eldoret or Kisumu. This would necessitate a formal request to the Kenyan Government”.

Based on the projected demand for 2010 of 240,000 tonnes of white products, there would only be only 8 x 30,000 tonne shipments/year, or 12 x 20,000 tonnes (one cargo/month).

It is necessary to compare fob costs (Med/AG) plus freight with domestic prices to see how much gross margin the importers/suppliers are obtaining (including inventory financing costs and storage/handling costs). Then the gross margin should be compared with some assessment of on-costs from Mombasa to Rwanda. To this needs to be added the costs of setting up and managing such a system.

The consultant’s view is that little money will be saved by centralising supply this way and there is considerable risk, if the bulk supplier were to become insolvent, as happened in Kenya. the Consultant provided data to the PSU on gasoline and diesel prices and futures including volumes to support their analysis that over a particular period bulk purchases would have been beneficial. Active debate is still occurring with industry over this issue.

Rather than incurring the cost of setting up an importing capability, if the Government is concerned about importers margins but regulates the pump price, the best course of action might be gradually to reduce pump prices to chip away at the margin until the government is seriously concerned about inevitable threats to withdraw supplies from the market - let the market price discover the inflexion point. Also this shares pricing risk with the industry rather than the Government bearing all the risk. This would of course be a significant departure from the present pricing policy.

There is currently an initiative to review the pricing and taxation system across several organs of government, including the Ministry of Finance, the RRA and MINICOM. This is expected to deliver a radically different policy.


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8. Japanese Oil Grant

The Japanese government has provided several million dollars a year of donor aid since the early 2000s to Rwanda by means of oil products.

Essentially the system is that oil (gas oil and gasoline) is purchased by the Crown Agents in London in a ratio specified by the PSU, by means of a tender. The Crown Agents operate on an annual fee and a fee per transaction. The bidders are first vetted by the PSU. The oil is delivered to Kigali and then subsequently sold by the PSU to local marketers on terms that they arrange. The proceeds go into a special enclave account for use for purposes agreed by the Government of Rwanda and the Japanese authorities. The extent of this aid and hence the volumes of this oil vary from year to year but it is of the order of $3 to $5 million/ year. This is a relatively small fraction of the total value of the petroleum product market in Rwanda (which is roughly 15 million litres = 150,000 M3, with a value = $850/M3 * 150,000 M3 = $128 million/ year, based on September cif Kigali prices).

However well the process is working, there is no guarantee that this support will continue as there is no long-term agreement with the Japanese. There was no agreement in 2008 and the status of Japanese grant negotiations for 2009 is confidential but as no result has been announced the likelihood is that support will not be forthcoming.

The following figure explains how the money flows in this system.

Figure 4 Cash Flows for Japanese Grant Aid

Source: Crown Agents 2008 – Ref. 8.

It has not been possible to do anything other than a superficial inspection of the system. A full audit to investigate key transactions, money flows and record systems thoroughly would be necessary to discover if there were any systematic deficiencies.


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There appear to be a number of checks and balances in the system in respect of the interface between the Japanese and the Rwandan government and oil product purchases seem to be at arms’ length and as far as can be determined from one or two sample contracts, on standard oil industry terms. However the number of players in good financial standing who can deliver oil to Kigali is limited.

One factor that is unusual is that because there is no quality testing at the point of redelivery, just at the point of initial loading (or transhipment if the products are transported from the Mediterranean or Gulf markets). The re-sale of the products is carried out by the PSU and the QA of this process depends on local staff. There has not yet been an opportunity to discuss the audit process. An initial comment is that the accounting process including certifying cheques etc is not automated and quite time consuming.

There were criticisms from the National Audit Office in 2006 that some payments were not properly recorded by PSU. This was before any of the present post holders were in place.

A manual needs to be written up of all the procedures and safeguards to protect not only financial risks but also to protect the officials in PSU.


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9. Compulsory Stock Obligations

9.1 International Practice

IEA countries have to comply with a compulsory stock obligation (CSO) to hold about 90 days of stocks of oil in various categories. This obligation is actually written in terms of requiring 99 days of net imports.

The IEA requires member states to have a reliable response system in place to release stocks in a timely and co-ordinated fashion in the event of international crises (that the IEA decides on, under certain rules). Some countries comply with the stockholding obligation but are weak on response (e.g. Australia had major difficulties complying in recent crises like Hurricane Katrina). Rwanda does not belong to the IEA, so while it has no international obligations to carry surplus stocks or to release them, it cannot get relief from other countries if there is a local crisis.

The US is unique in having a Strategic Petroleum Reserve organised and paid for by the government. It is “the largest stockpile of government-owned emergency crude oil in the world” according to the website, http://www.fe.doe.gov/programs/reserves/index.html. Decisions to withdraw crude oil from the SPR are made by the President under the authorities of the Energy Policy and Conservation Act. In the event of an energy emergency, SPR oil would be distributed by competitive sale. The SPR has been used under these circumstances only twice (during Operation Desert Storm in 1991 and after Hurricane Katrina in 2005). “Together, the facilities and crude oil represent about $22 billion investment in energy security ($5 billion for facilities and $17 billion for crude oil).”

In Europe, with agreement from the IEA, a separate obligation is imposed by the EU on member states to hold 90 days of inland consumption of stocks, subject to a series of derogations. The UK for example is allowed a 25% derogation because it is a net oil producer, so it only needs to hold 67.5 days of stocks. These requirements are spelt out in national legislation. EU Member States apply the requirements in different ways. Some countries have centralised bodies holding part or all of the CSO, while others, including the UK, impose the obligation on market operators. Commercial operators can trade CSO obligations across Europe (called “ticketing”) and there are strong incentives to do this. For example in the UK excise duty becomes payable at the exit from primary storage, even if it is destined for bonded storage elsewhere, whereas the duty point is further downstream in most other countries in Europe, in some cases at the depot immediately prior to delivery. All companies will want to keep their duty-paid stock as low as possible consistent with maintaining CSO obligations and maintaining supplies to their customers.

There are also a series of bilateral intergovernmental arrangements between some countries that allow stocks to meet obligations to be held in one country for the benefit of another. Some of New Zealand’s CSO obligations are met by storage in the UK and Ireland rents storage from the Ministry of Defence in the UK to meet part of its obligation.

Moving outside Europe, there is an even wider spectrum of institutional systems around the world designed to carry out this stockholding obligation, ranging from a government agency (USA) as described above, to one run entirely by the industry (the UK system) under government regulation; and many hybrid agency-based schemes in between. Different countries have decided for historical or other reasons to place the primary obligation on agencies or on industry players. The system is complicated by bilateral arrangements and by a ticketing system, which allow operators to buy in access to storage in other countries – not necessarily physically close to hand. Some countries rely extensively on tickets and bilateral arrangements and others do not (e.g. Germany does not allow tickets). The funding for these agencies varies from 100% governmental through to 100% industry. In the case of agencies some are set up us non-profit making companies. Several operate by means of levies on the industry but some can raise finance


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themselves in the markets. Many countries have had legal challenges to their detailed systems. Most notably in Germany in the 1970s and recently for differentiated stock holding in the UK (the “Mabanaft case”).

Table 2 Summary of EU15 Stock-Holding Systems

Country Agency Share Coverage Minimum Held by Companies

Cut-off volume for Exemption

Austria 15% Importers 85 days (aprox) No Belgium Just started Refiners,

Importers Was 90 days No

Denmark 70% Producers, Refiners, Importers

20 days (aprox) No

Finland 80% Importers 40 days 5-20,000 tonnes pa France 50% Importers 40 days No Germany 100% Refiners and

Product Importers 15 days No

Greece 0% NB former state oil co effectively covers obligation

Product Marketers Importers

90 days No

Ireland 90% Importers Large consumers

20 days No

Italy 0% Electric Utilities Refiners Marketers

90 days No

Luxembourg 0% Importers 90 days No Netherlands 85% Refiners Importers 15 days 100,000 tonnes pa Portugal 40% Importers 55 days (aprox) No Spain 40% Refiners Marketers

Large Consumers 55 days (aprox) No

Sweden 0% Refiners Importers Consumers

90 days 40,000 tonnes pa

UK 0% Refiners Marketers 67.5 days/ 48.5 days incl. derogation

100,000 tonnes pa

Source: 2006 EMC Report to (at the time) BERR (UK Government –now called DECC (Department of Energy and Climate Change)). The UK system has since moved away from the concept of threshold volumes that protected smaller suppliers from having to meet CSOs. DECC is responsible for the administration of the IEA procedures in the UK.

The IEA and Europa websites (the latter of which contains details of actual compliance across member states – Ref. 21)), contain some informative references, including:

a) “The UK Downstream Oil Market and Compulsory Stockholding” – Energy Market Consultants, November 2003, prepared for the Department of Trade and Industry and available for download on the BERR website, http://www.berr.gov.uk/. (BERR is the successor to the DTI and Department of Energy) (Ref. 22).

b) A further report dated 2006 entitled “Differentiated Obligatory Oil Stock-Holding Requirements in the UK” by Energy Market Consultants, which deals with developments in the ticketing system and whether the UK should change its CSO system, is also available on the BERR website. (Ref. 23).


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The second of these reports details how different countries have quite distinct systems for meeting CSO obligations. It is clear that the details of the CSO compliance systems are quite complex.

It is also apparent that establishing the minimum operating inventories required by industry rather than governments is not straightforward.

“The question of “normal” minimum operating stocks (MOR) is notoriously difficult to specify precisely – partly because it varies considerably, depending upon geographical, logistical and seasonal factors and will thus differ widely between individual markets/ regions. In reality the MOR of a complete supply chain will be determined by its weakest link in the delivery chain: the point at which the flow of oil is interrupted. This can be considered the technical limitation. Conversely, the level of minimum stocks within a delivery system also depends on the expertise of the operator in attempting to distribute inventories evenly throughout the supply chain.”

The majority of EU members operate centralized stock-holding systems, which involve at least a large proportion of the compulsory stocks being held by a government-owned central storage organisation or a partly independent stock-holding agency.

“The proportion of CSO held by these agencies varies from 100% in Germany to, for example, 15% in Austria – though in most countries this ratio is 50% or more and there has been a tendency over time for this proportion to increase”.

Some countries apply exemptions for small stockholders.

Rwanda of course has no legal treaty obligations but as a land-locked country at the end of long overland supply route is particularly vulnerable to supply upsets and must look to its own needs for stocks. The government has historically provided (and paid for) all the strategic stocks, which is a massive financial burden and also a day-to-day burden on the PSU as part of a Ministry without the right IT tools, individuals with industry backgrounds familiar with hydrocarbon accounting systems or input from industry.

What we are proposing for Rwanda is very much the simplest possible system that moves a small part of the burden from the government onto industry, following Ugandan practice, as explained below.

9.2 Neighbouring Countries

9.2.1 Introduction

Rwanda should review practices in neighbouring countries that take account of the limited number of players and the relative unattractiveness of the downstream oil market to international companies. Imposing unrealistically high CSO obligations might cause key players on whom the successful operation of the market depends to reassess whether they wish to continue in Rwanda, and also deter potential new entrants who might feel that the relative stability and growth prospects are in other respects attractive.

Put simply, whatever the ideal position might be, if Rwanda goes out of step with its neighbours it could be seen to be uncompetitive. Holding oil stocks means additional working capital and storage fees (or opportunity cost of not being able to rent out storage as the case may be).

9.2.2 Kenya

We rehearse certain conclusions here taken from previous work done by Ian Thomson in Kenya (“Harmonisation of LPG Standards”, for the Government of Kenya in September 2003 – Ref 24)),


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“Until the pending Petroleum Bill is adopted by Parliament to replace the PA, the GOK relies on some other antiquated laws for the control of some aspects of the oil marketing companies’ (OMCs) commercial activities as well as the safety of their operations and installations and to encourage competition by prohibiting restrictive trade prices.

… (confidential commentary on pricing) …

The Government [of Kenya]’s direct involvement in the import of white products was terminated with the liberalization. However, the public sector retained a strong presence in storage, refining and transportation of petroleum products through state owned corporations, as described herein below. For some time after 1994, the imports were still procured through a tendering system, coordinated by the Ministry, which has since been abandoned. OMCs are now, in principle, free to import refined products, subject to the obligations to import light crude oil and refined products at a certain ratio and deliver the crude for processing to the refinery in order to keep its processing volume at the level necessary to produce a required minimum supply of LPG. Newcomers in the domestic market were initially, but are no longer exempted from this requirement, which is not based on any law or regulation and is supposed to be lifted in the near future in view of the fact that new LPG import facilities were finally built by the oil companies at their Shimanzi/Changamwe marine terminal in Mombasa.

Based on the Essential Supplies, Imports and Exports Act (Cap. 502), the Minister of Commerce and Industry ordered the OMCs in 1994 to hold minimum operational stocks equivalent to 30 days' consumption of liquid products and ten days for LPG. It does not appear that those requirements are monitored and enforced by any particular government agency.”

To date it is not been possible to confirm the 30 day CSO figure still applies for Kenya, although other consultants working in Kenya have verbally confirmed that it is their understanding that the 30 days rule applies. Neither the 2006 Energy Act nor the Petroleum (Amendment Rules) 2006, which we have reviewed, appear to contain any mention of compulsory or strategic oil stocks.

9.2.3 Uganda

The rules for CSO in Uganda were laid out in the 2003 Petroleum Supply Act of 2003. Whether these have been updated needs to be checked. This says (at Section 26):

“(1) In order to assure continuity of the petroleum supply in Uganda, every licensee shall at his or her expense, maintain minimum working stocks of petroleum products as prescribed by the regulations.

(2) The level of stocks under subsection (1) shall be not less than ten days of the average amount of any product handled or consumed by the respective licensee within Uganda during the period of three months preceding the effective date of determination.

(3) For the purposes of this section, the minimum working stocks shall include all petroleum products held in storage depots in Uganda and shall exclude petroleum products:

(a) in transit within Uganda or to and from any other country;

(b) held in retail service or filling stations; and

(c) held in consumer storage locations.

(4) Where changes occur in the levels of minimum stocks for any licensee of petroleum products by the amendment of any regulations made by virtue of subsection (2), those changes shall only apply to new licences or the renewal of existing licences.

(5) The level of minimum working stock for new licences shall be determined at start of operations, based on the information furnished with the application, for an initial period


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of one year, at the end of which the final determination shall be made according to this section.

(6) Any person who fails, without lawful excuse, to comply with subsection (1) commits an offence and is liable, on conviction, to a fine not exceeding twenty four currency points.

(7) For the avoidance of doubt, section 23 applies to any contravention of this section.”

(Section 23 refers to powers to suspend or revoke licences).

In summary there appears to be a compulsory obligation on industry players to hold 10 days stocks in Uganda according to the Petroleum Supply Act. We have been unable to determine whether this requirement has been boosted by additional regulations or softened in practice as a result of pressure by industry; or the extent to which it is policed.

9.3 Capacity Constraints at Depots

Before proposing what the CSO obligations should be for Rwanda, one should recognise some major physical constraints in that

(a) at present there is limited storage capacity,

(b) not all of the storage is operated to international standards and

(c) some storage is badly in need of repair.

The sites are also spread out around the country and one is dedicated to aviation fuel. There would be no point in setting out rules for CSO obligations that taken in tandem with operational storage needs exceeds the physical capacity available. Not all capacity is available for strategic government stocks. For example the Kabuye depots with a capacity of 5 million litre are leased to a private dealer (Total).

The February 2006 Technical Task Force draft report notes at page 17 that

“Total monthly demand is now estimated at around 8 million litres (both PMS and AGO)…. This therefore means that the total capacity available is approximately 2.4 months supply. Unfortunately we established that event the existing capacities are never utilized, for there is no(t) sufficient imports to cover existing capacities... there exists no recommended reserve for private firms to keep.” (The arithmetic is not entirely clear).

The Petroleum Sector Strategy (October 2008) updates the average monthly demand figure to 15 million litres, which reduces the stock figure to about 2 months’ worth of demand. At any time about half the storage is needed for operational reasons and not available for strategic storage. Hence at present strategic storage is approximately 30 days worth, all of which is supplied and owned by the government.

A return of rapid growth is expected in the Rwandan petroleum sector once the present flat period caused by historically high oil prices is over, or the economy adjust to those prices, so these storage reserve margins are likely to erode over the next 5 years.

Approximately 75% of all available capacity in the country is presently used to hold government-owned oil, which is a factor that needs to be taken into account when considering what stocks companies are made to hold. See table below – data from PSU (May 2009):


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Table 3 Government Stocks as of May 2009

Source: MINICOM May 2009.

The Petroleum Strategy notes five important reasons why Rwanda should build more depots to stock strategic reserves at least for a medium term of six months:

• “Misunderstandings with countries of transit may cause temporary blockages. In the absence of sufficient reserves, the country could be held to ransom before a negotiated settlement is found.

• Internal unrest or natural calamities e.g. floods in the country of transit may disrupt supplies. The effects can be disastrous if there are not sufficient reserves for the country to turn to before a long-term solution is found.

• Greater storage capacity would enable the country to purchase products in bulk and hence enjoy economies of scale associated with bulk purchase. It would also make it possible for strategic reserve managers to plan ahead and restock the depots when international prices are low. This in turn would create a leverage needed to stabilize domestic prices at the time international prices are very high. However this would entail the managers to take on a trading role and to be able to anticipate oil price changes, which it currently is not set up to do. This also involves risk as prices can go in either direction at short notice.

• Sufficient reserves serve as price stabilizer: In periods of very high international prices, more quantities of the products are placed in the market from the reserves at a price lower than the international price, the impact being to stabilize the price at an affordable level.

• A bigger storage capacity could be used to store products for export in the neighbouring countries. This would have positive economic benefits both for Rwanda and the neighbouring countries in terms of forward and backward linkages. Indeed this may be one of the attractions for private sector participation, as having access to storage capacity could underpin marketing efforts in nearby countries”.

PMS Volume Million litres

PMS % of available capacity

Diesel Volume Million litres

Diesel % of available capacity

Gatsata 3.6 58 3.0 61 Kabuye 1.0 35 1.25 62.5 Rwabuye 1.8 100 1.8 100 Bigogwe 2.9 100 1.8 95 (nominal) TOTAL excl Avtur

9.3 68 7.85 78.5


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9.4 Retail/ Distribution Stocks

There are also substantial stocks held at filling stations (and a small volume in transit though the distribution chains). These were identified in a field survey by the 2006 task force mentioned above. Unfortunately the details are supposed to be in an Annex (see page 16 of the report but this is not available in the bound copy given to the Consultant by MINICOM. There is however the following table, the accuracy of and interpretation of which is difficult to verify. The report notes that many of these tanks are very poorly maintained and not calibrated regularly:

Table 4 Existing Capacities at Underground and Ground Storage Tanks Location Overall capacity

(litres) PMS AGO BIK

(Kerosene) Kibuye 300,000 150,000 100,000 50,000 Gikongoro 300,000 150,000 100,000 50,000 Kibungo 300,000 150,000 100,000 50,000 Kigali 600,000 300,000 200,000 100,000 Total 1,500,000 750,000 500,000 250,000 Source: Page 16 of Feb 2006 MINICOM Technical Task Force - Ref. 1

Whether or not storage capacity in fillings stations should be included towards meeting any CSO obligation is a deep issue. Some countries do allow stocks to be held outside the principal storage sites (for example Spain has regulations about strategic storage of natural gas and the government has allowed a number of different types of stocks including line fill in transmission pipelines to be included, probably due to strong industry reaction).

Including these stocks makes for difficulties in metering and accountability (certainly if there is any central organisation set to handle CSO obligations) but including such stocks may make the proposition more palatable for the industry. Of course the poor location of some fillings stations noted in the February 2006 Technical Task Force report may mean that stocks could be held in the wrong places and be an ineffective provision as it would not increase the security of supply materially.

As duty is payable immediately stocks leave the first import site, stocks at any locations downstream of the importation site would have to have duty paid on them, so the working capital costs would be greater than at the importation site.

Efforts should also be made to encourage Petroleum marketers to maintain a minimum level of stock in their underground tanks at petrol stations. This needs to be stated explicitly in regulations to ensure compliance. However allowing these stocks to count against CSO allowances would be fraught with measurement and reporting difficulties.

9.5 Security of Supply

All the above considerations have to be balanced against security of supply concerns that are very real. The election riots in Kenya in 2008 very nearly caused supply disruptions to be felt in the Rwanda and southern Uganda and it is a tribute to the PSU and the operators that this did not happen. But indications are that had the disturbances gone on even a short time longer, supplies would have started to be interrupted. This could have caused panic buying and initiated a vicious circle of further disruptions. Ultimately Rwanda is landlocked and at the end of a supply route that does not have 100% availability even under normal operating conditions.


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If and when a new pipeline extension is built from Kenya to Kampala and further extended to Kigali capacity constraints and costs should be reduced and reliability increased but this still requires physical security to be maintained at above ground terminals, which is outside the control of Rwanda.

The idea of developing a second supply route is clearly very helpful but the relative costs of transportation from Dar-Es-Salaam mitigate against this route except in emergency circumstances.

9.6 High Level Task Force Nov 2006 - Recommendations

The High Level Task Force (Nov 2006) formulated important policy recommendations including the need to tighten up licensing. There was particular concern expressed about the need to hold far more stocks than at present because of a perception of great vulnerability of Rwanda to petroleum supply disruptions. Clearly if any military or similar threat were to develop then Rwanda should urgently review the level oil stocks as a fundamental factor in preparedness for such eventualities, along with many other strategic issues.

The High Level Task Force considered that the Government should take over any CSO role and further recommended that:

“The strategic reserves for the country be set at six months of imports and to manage this requires increasing storage capacity. This is proposed because:

• Rwanda is a land locked country and therefore transportation of such products is problematic;

• In case of differences with countries where the products pass, the country would be able to run for sometime while alternative routes are negotiated;

• If the supplying countries had internal unrest or experienced difficulties of natural nature say natural disasters, the country would be able to run for sometime while alternative sources are identified;

• A bigger capacity could be used to store products for export in the neighbouring countries and this would have positive economic benefits;

• Sufficient reserves would serve as price stabiliser.

Encouraging partnership between Government and the private sector in putting up new storage infrastructure capable of storing the proposed reserves”.

The report went further and attempted to develop a cost benefit analysis to support their proposal. Without commenting on the form of this analysis, which would in any event need to be supported by other Ministries including MININFRA, the case would need proper financial justification.

The report appears to suggest that the government should essentially be responsible for funding as well as organising such a scheme. The complexity and resources required in countries that operate a central scheme should be clearly understood by the decision makers in the Rwandan government before embarking on such a course. As a final comment, such schemes often operate by means of a levy of some form on the industry so not all the costs are actually borne by the state. The government should actively pursue policies that do not increase the burden on the state sector.

However boosting strategic stocks must form part of an integrated petroleum policy. As the recent draft of the Petroleum Sector Policy points out: “Storing reserves (Guhunika) to take care of future uncertainties is part and parcel of the Rwandese culture.”


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Compulsory Stock Obligations should be spelt out in primary legislation (although the actual number of days should be left for Ministerial updating by regulation from time to time).

The simplest possible way forward (apart from doing nothing, which is not recommended) is to work towards imposing an obligation on operating companies to hold 20 or 30 days stocks at their cost, given all the factors considered above and quite a generous level for a poor country due to high inventory carrying cost.

Another yardstick is how long would it take to source and deliver alternative supplies if current supplies were to be disrupted. The PSU considered that this would take about a week in the light of experience with the supply disruptions experienced in Kenya at the time of the elections and the aftermath and later when the bulk import supplier in Kenya became insolvent.

Given the present high level of government stocks and the fact that there is probably only 10 days of motor spirit capacity and 5 days of diesel capacity remaining at the present time, it is unrealistic to set a large number of days CSO obligation on the industry, unless some of the government stocks are taken over by industry. The 8th draft of the Petroleum law proposed to MINICOM suggested a 7-day CSO. The Final Draft of the Petroleum Law accepted by the Minster leaves this figure to be promulgated by Ministerial Decree from time to time.

9.7 Costs of New Tankage

A UK engineering company kindly prepared a draft cost estimate (order of magnitude at best) for a basic 15 million-litre new tankage site:

Design phase costs of some 1,300k - Feasibility say 200k over 4 months - Concept design say 400k over 6 months - Design say 700k over 1 year OE costs of some 1,500k - Owners Engineer/PM support assume 1,500k over 3 years DD costs of some 400k - Due Diligence say 400k over 4 months Construction over 2 years some 7,400k - 5 million litre storage tank, 800k (assume 2,400k for 3 tanks) - Pumps, piping and ancillary systems 1,500k - Fire protection system (Foam deluge) 600k - Metering systems 300k - E,C&I and Control room 900k - Civils, buildings and fencing 1,200k - Balance of plant say 500k Total 10,600k UK£ Accuracy +30% Land costs not included OPEX not included

This estimate was reviewed by another UK engineering company in October 2009 (Mott MacDonald) and they considered that these estimates could be anything up to 30% too high based on actual outturn costs on a recent Middle East project that they had managed.


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9.8 Provisional Recommendations

The simplest possible way forward (apart from doing nothing which is not recommended) is to work towards imposing an obligation on operating companies to hold 20 or 30 days stocks at the main storage sites. This can initially be by means of a voluntary code of practice to avoid abrupt changes but should result after a transitional period in a mandatory regulation or Statutory Instrument to impose a minimum working stock level. 30 days is probably about right as a target given all the factors considered above and quite a reasonable level for a poor country due to high inventory carrying cost. It is however not fair or appropriate for the entire burden of holding what are in effect strategic stocks to fall on the Government in the future.

One yardstick for how many days’ stocks to hold is how long would it take to source and deliver alternative supplies if current supplies were to be disrupted.

In the first instance establishing a centrally run organisation to manage CSO obligations is probably rather heavy-handed and may impose too much burden on the industry, whether or not it is mainly funded by the Government. However if compliance with any new rules is patchy then this option may need to be considered.

If any military threat were to develop then the low requirement for holding 20 or 30 days stocks (or 7 initially) should of course be reviewed.


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10. Technical – Standards and Operational Safety

10.1 Introduction – Feb 2006 MINICOM High Level Task Force

The High Level Task Force review of the Petroleum Sector (draft report November 2006) came up with very similar findings to the earlier report of the Technical Task Force in February 2006. The High Level Task Force made comprehensive recommendations that are repeated here for ease of reference. The Petroleum Strategy has a key objective of implementing an appropriate set of standards in the sector.

“International best practice requires that petrol storage tanks have to conform to certain standards especially those relating to environmental, safety and health needs. Most of these are included in the Ordonance du Rwanda-Urundi 41/78 of May 28th 1956 and they concern what is normally referred to as “Permis d`Exploitation” though they appear not to be followed or enforced. Although they appear to be present, they are very old and need to be reviewed to take care of the present situation. The standards cover; installations, alteration to storage tanks, thickness of steel, etc. The following are some of the examples of requirements for one to construct a petrol storage facility:

• Approved location by city or urban Authorities

• Objective of constructing the storage facility;

• Plan of the structure should be given;

• Commitment to self-regulation;

• Regulators standards;

• Commitment to product quality information disclosure;

• Commitment to periodical or regular site inspections by regulatory agencies;

• Commitment to regular environmental impact assessment;

• Presence of fire fighting equipments

• Commitment to both domestic and international transport requirements such as;

• Calibration certificates & validity

• Fire extinguishers on transportation vehicles

• Sound mechanical conditions of vehicles

• Domestic transport whether domestically registered (see transport policy for details), etc.

• All dealers/Petrol station managers to have training program of their staff on safety and health standards, etc.

Operational requirements

“Given the apparent failure of the Private Petroleum Dealers to supply the market adequately during the crisis, the Government has to build up stocks of petroleum products to improve the reliability of supply. This should be done in joint collaboration with petroleum companies as earlier mentioned.

• Other requirements to include;

• Security system in place is required

• Contingency plan must be provided


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• Regular environmental audits to ascertain compliance

• Safeguards on health hazards

• Record keeping

• Environment action plan

• Product quality information disclosure

Maintenance requirements

“The following requirements should be emphasized for maintenance purposes:

• Oil/water separator

• Wastage Management system to be in place

• Water management system to be put in place

Findings from existing laws/regulations

“Currently, running a petroleum sector business does not require much in terms of conditionality. This has lead to many small time speculative operators. Due to the absence of strict regulations and enforcement, many operators do so using unsafe means like old and leaking fuel tankers, dealers with no ability to sustain their stocks (facing constant shortages and none operating petrol stations), petrol stations that do not meet the required standards, etc.

Law No. 15/2001 of 28th January 2001 concerns the regulation of internal trade in Rwanda. Among its articles and provisions, some considers the separation of functions of wholesalers and retailers that is however not enforced by the Ministry. The law also gives the Minister in charge of commerce the power to put in place management program of petroleum strategic reserves. This does not exist. The above law also requires the Minister responsible for trade to put in place instruction/order governing traders in goods/materials to have an after sale facility.

The Ordonance du Rwanda-Urundi 41/78 of May 28th 1956 concerning “permis d`exploitation” was enacted before independence and has not been modified or abrogated to date. This is a very old law that has never been amended to reflect the changing circumstances over time. Never the less, its provisions are not enforced in spite of being relevant and commensurate with best practices in the fields specified. The activities/business specified under this law include those that are likely to be harmful or dangerous (or have negative externalities) to the population.

This law provides for the following before opening up or construction of a new petrol station.

• Environment Impact Assessment study. We found out that this is not done;

• The firm/individual who seeks construction of petrol station must provide the plan of the structure. This is not done;

• Communication notice to residents around the place a petrol station is to be constructed is required. Not being followed;

• Self-regulation on environment standard compliance. Not done”


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Recommendations

“There is need to enforce the separation of the functions of wholesaler/retailer/distributor for a better organization and economic efficiency of the sector;

Require petroleum product importers and oblige them to set up a strategic reserve equivalent to a certain percentage of their annual sales. The team proposes a 4-month government reserves and 2 months of import for the private operators. In total we recommend that we should have 6-month volume of strategic reserves (5 month for strategic reasons and 1 month for commercial stock). This should be legislated and be part of the conditionality for licensing.

Enforce the Reserve Storage at the petrol stations of at least 1 month storage measured as % of the total sales over a defined period of time.

Put in place a management program for national petroleum strategic reserves through the proposed Petroleum Product Regulatory Act that will monitor the day to day operations of the petroleum sector.

The Minister in charge of trade should give standing instructions on those areas that the law requires clarity. In particular, the Ministry needs to prepare instructions/Act specifically to regulate petroleum business.

Management Program of the strategic reserves should be given special consideration. Most of the best practice will depend on putting in place a good management program and Rehabilitation of Bigogwe Petroleum Depot.

Ordonance du Rwanda-Urundi 41/78 of May 28th 1956 and its several provisions be updated to reflect the present reality and should include but not limited to the following:

Undertake an Environment Impact Assessment study.

Then environment impact audit of already existing petrol stations should be conducted;

Carry out a general inspection of all petrol stations in Rwanda, to ascertain if they comply with the existing laws;

Propose to city and municipality authorities to put in place petrol station site road map in the context of city/urban development plans;

The Act should also define and determine location and proximity of petrol stations between each other and the surroundings. If one considers the number of petrol stations from SOPETRAD to GIPOROSO through RWANDEX, numbering more than 16 and the security threat they may cause in case of fire, regulation is urgently needed.”

10.2 Comments

The recommendations above cover many areas, including strengthening primary legislation, tightening up licensing procedures and ensuring compliance with a set of minimum technical standards. Each of these requires institutional and operational work to design and implement. Thus there is no purpose served by setting up any codes and standards if there is no way of making sure there is compliance, e.g. a trained inspection force and adequate penalties in the event of non-compliance. In general we support the findings in Section 8.1 above.

Legislation, licensing controls, compulsory oil stocks and institutional matters are dealt with elsewhere in this paper. This section addresses technical and HSE aspects.


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10.3 EIAs

The Rwandan authorities recognise that Environmental Impact Assessments need to be carried out for all major projects and also for the approval of filling stations.

10.4 Transport by Road

Transportation regulations need to be introduced that form a system for the safe carriage of hazardous goods. The consultant needs to discuss with the Ministry of the Environment any other legislation in Rwanda covering this area. It needs careful consideration and discussion with the Rwanda Bureau of Standards.

There are various possible systems including those adopted by the Kenya Bureau of Standards approach, ISO and British Standards.

A model approach is set out by UNECE The European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR) was signed in Geneva on 30 September 1957 under the auspices of the United Nations Economic Commission for Europe, and it entered into force on 29 January 1968. The Agreement itself was amended by the Protocol amending article 14 (3) done at New York on 21 August 1975, which entered into force on 19 April 1985. The Agreement itself is short and simple. The key article is the second, which say that apart from some excessively dangerous goods, other dangerous goods may be carried internationally in road vehicles subject to compliance with:

• the conditions laid down in Annex A for the goods in question, in particular as regards their packaging and labelling; and

• the conditions laid down in Annex B, in particular as regards the construction, equipment and operation of the vehicle carrying the goods in question.

Annexes A and B have been regularly amended and updated since the entry into force of ADR. The last amendments entered into force on 1 January 2007, and consequently, a revised consolidated version was published as document ECE/TRANS/185, Vol. I and II ("ADR 2007").

The structure is consistent with that of the United Nations Recommendations on the Transport of Dangerous Goods, Model Regulations, the International Maritime Dangerous Goods Code (of the International Maritime Organization), the Technical Instructions for the Safe Transport of Dangerous Goods by Air (of the International Civil Aviation Organization) and the Regulations concerning the International Carriage of Dangerous Goods by Rail (of the Intergovernmental Organisation for International Carriage by Rail).

In any event regulations like this need to be incorporated into national law. In the UK for example this is achieved though “The Carriage of Dangerous Goods and Use of Transportable Pressure Equipment Regulations 2007”. A comprehensive guidance manual can be downloaded from http://www.hse.gov.uk/cdg/manual/.

It is of course fully accepted that the standards for road trucks for transit into Rwanda and within the country fall a long way short of these ideals. Many are old and poorly maintained would simply not be fit for purpose outside the region.

The consultant does not disagree with any of basic engineering pointers suggested in the Feb 2006 Technical Task Force. It is stressed that the consultant is not an expert on these regulations. For ease of reference these are:

“Rwanda relies heavily on Road Tank Wagons (RTW) to transport fuel products from mainly Kenya through Uganda (northern Corridor Route), however the central corridor is not usually used. Distribution of the fuel products within the country is mainly by semi-road tank wagons. Handling of wet cargos (petroleum products) presents


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environment safety and health hazards that need to be monitored and controlled because they can result in disaster. Transportation of wet cargos in Rwanda passes across very environmentally sensitive wetlands and heavily populated areas along the transit routes creating risks to the environment and general population.

Petroleum road transport is made even more dangerous by the difficult terrain in many parts of the country. Because the above mentioned concerns, there is need to set up stringent safety and regulatory framework on local and international transportation of petroleum products.”

10.5 Standards for Road Tank Wagons

The Technical Task Force in February 2006 suggested the following basic standards for road trucks.

Basic Standards

• The tank and all fittings are to be suitable for handling petroleum products. Tank material shall be either mild steel or aluminium not copper

• For compartments exceeding 4 500 litres a baffle plate shall be installed and this baffle plate should have minimum thickness of 5.2 mm

• Front and rear end plates should be double walled of 5.2mm of minimum thickness

• The minimum ullage space of each compartment should be 4% of nominal capacity

• Each compartment is to be designed to ensure complete drainage with the vehicle standing in a 1 in 20 slope in any direction

• Tank should have cofferdams between compartments and these cofferdams should be plugged and sealed.

• Each tank compartment shall be tested hydrostatically to 0,34 bars.

Road Tank Fittings

• Each compartment shall befitted with a manhole cover with pressure and vacuum vents set at 20 millibars

• Manually operated 63mm-100mm diameter foot-valves are to be fitted on each compartment

• Manually operated globe valves (63mm 10Omm) are to be fitted on each compartment outlet

• Outlet pipes shall be of seamless and shall terminate at the same location in the left hand side centre of the truck and enclosed in a lockable cabinet

• Each compartment outlet shall have a foot-valve, gate valve and end cap

Hoses

• Hoses shall have a design pressure of 3 bar, resistively not to exceed 0.75 ohms per meter, internally reinforced along the entire length with copper/steel strings

• All hoses shall be electrically continuous

• Each hose shall bear the following details stamped on it: manufacturer, date of manufacture, design pressure and design standards


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Top of Road Tank Fittings

• An appropriate walkway with appropriate grating shall be provided on the top of the tank

• The coaming shall be U-shaped and installed along the entire length of the tank

• A walkway access ladder shall be provided at the rear of the tank

• Other fittings to be provided are hose racks, dipstick stowage, two internal drain pipes

Electrical Systems

• All electrical systems shall PVC insulated and run with semi-rigid plastic conduit

• The vehicle shall be fitted with battery isolation switches located inside and outside the cabin

• An appropriate copper or brass earthling strap shall be fitted on the truck chassis and shall not be painted

• The battery shall be provided with an appropriate cover to shield it from petroleum products

• Vehicle shall be fitted with reversing lights and beepers

• Lights shall be fitted to meet with local traffic requirements

Miscellaneous Fittings

• The vehicle shall be fitted with two of 9kg dry powder fire extinguishers secured with a liable quick release bracket. The extinguishers shall serviced and certified every six months

• A heavy duty rear bumper is to be fitted across the rear of the tank crossing the entire width of the tank

• A rear under-run bumper and side guards shall be provided

• Suitable sealing facilities shall be provided on the outlet valves and top manhole covers

• A minimum of two wheel chocks with holders shall be provided

Calibration

• Calibration shall be carried out to meet the requirements of the weight, measures and regulations of Rwanda Bureau of Standards or any other contracted firm.

• Insurance coverage

• All Road Tank Wagons carrying oil products shall have a covering insurance policy for the hauliers, cargo on board, drivers and third party.”

In addition there will need to be proper driver training and certification, and special training for LPG carriers, adequate basic emergency response capability in each marketer.

We support the above recommendations.


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As a first step Rwanda should consider harmonising with EAC transport standards. (This recommendation was made in the Feb 2006 Technical Task Force report (Ref. 1) at page 22).

10.6 Standards for Filling Stations

The recommendations made in the Nov 2006 High Level Task Force report reinforced the above conclusions:

“International best practice prescribes minimum requirements for one to run a petrol station business… They include the following:

• Size/ Land utilization

• Toilets

• Fire extinguishers

• Insurance policy coverage

• Safeguards on health hazards

• Station Roofing (canopy)

• Oil interceptor

• Wastage management system

• Environment management strategy/action plan

• Quality information exposure e.g. Display of prices to the public

• Brand labels, price display

• Leakage measures, etc.”

We suggest that these rather general findings be amplified by means of simplified Inspection Checklists – see Appendix B, which have adapted from another DFID advisory project (in 2001). This also covers aspects such as spacing and recertification of underground tanks, electrical safety etc.

10.7 Occupational Health and Safety

Various reports including the Petroleum Policy illustrate the poor adherence of filling stations to even basic operational health and safety practices, such as issuing the workforce with protective clothing, posting signs about not having naked lights or using mobile phones and having sufficient fire extinguishers to hand, let alone fire inspection certificates or proper approvals.

As the project unfolds detailed recommendations will be made in conjunction with the Rwanda Bureau of Standards and any Petroleum Licensing Authority on minimum standards to protect workers and third parties.

10.8 Standards for Storage Sites

The technical regulations for storage sites are complex and vary in detail from country to country. A summary of the principal codes and standards that would be applicable in the UK (and with relatively minor variations in the USA and Europe although they may have different names) for the petroleum sector is given in Appendix A. This covers other technical systems found in the


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downstream petroleum sector and also contains lists of ISO standards for the Rwanda Bureau of Standards to review.

10.9 Fuel Standards and Quality

A very important aspect of technical standards is the fuel quality. While there is a chromatograph at the Rwandan Bureau of Standards, it unclear if there is a fully equipped laboratory capable of carrying out the fuel quality tests that would be expected in for example Europe or the USA and which are laid down in the fuel quality specifications.

The first step is to identify what the specifications are for all fuels being sold in Rwanda and whether there are plans to introduce tighter specifications over the course of time, for example ultra low sulphur gasolines and diesels.

Fuel quality at the forecourt at present depends on the robustness of the QA systems not only of the suppliers at Mombasa but also of each operator along the entire supply chain from Mombasa through to Kigali, as there is no means of testing fuels in country. The supply chain will include a batched transportation process along a multi-products pipeline in Kenya, storage at Nairobi or Eldoret, transhipment via lorries, further storage in Uganda etc. Adulteration could take place at any point along the chain. From previous work in Kenya, it is understood that poor fuel quality has been a serious concern in Kenya. (For example there is a press report dated 24th August 2008 at http://ippmedia.com/ipp/guardian/2008/10/24/125050.html that states “Fuel adulteration has dropped by 40 per cent in the country, the latest Energy and Water Utility Regulatory Authority (Ewura) study has revealed. Ewura Director General Haruna Masebu exclusively told `The Guardian` yesterday that in the past, fuel adulteration was common in the country but currently the situation had improved.”

It is understood that samples are not taken at intermediate points along the supply chain as there are no means of testing samples reliably.

Hence setting up a third party laboratory to test transport fuels must be a high priority. The threat that fuel quality can be tested at any time would keep marketers honest.

These services can be provided by mobile labs under contract by companies like SGI. Donor support might be available for a 3 to 6 months hire of a mobile testing lab until a capability is set up either through the Rwanda Bureau of Standards or in Kigali Municipality. It is recommended that RBS and PSU actively pursue the possibility of hiring such a mobile test lab from a firm like SGS (with a training component to make sure that RBS staff know how to calibrate and use it) and also perhaps arrange support to purchase the relevant test equipment


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11. Discussion and Recommendations on Way Forward

11.1 Market Issues

Rwanda is landlocked and will remain at the end of a long and supply chain for petroleum until such time as significant upstream production becomes available in Uganda or Rwanda itself.

The Rwandan market is relatively small and while growth has been held back over the past two years by high oil prices and the international crisis, relatively high growth rates can be expected in the future in line with strong GDP growth and increased use per capita of refined oil products. Rwanda is a poor country and high oil prices place a great strain on the economy. This means that Rwanda is especially vulnerable both to international oil supply and price shocks but also to disruptions along its supply routes to the north (via Kenya and Uganda) and the south (from Dar-Es-Salaam). Two of the national objectives are to develop systems to try to mitigate oil price hikes and also to try to bring some geographical diversity to the supply system.

Total monthly consumption is slightly higher than 15 million litres (all types of fuel combined). The total storage capacity of 30.6 million litres covers only 2 months of consumption needs and half of this can be attributed to working stocks required for operational reasons.

Excluding storage of Jet A1for Kigali airport, there are four storage facilities: one private facility of 5.45 million litres and three government facilities totalling 23.65 million litres (81% of total capacity) of which one facility of 15.35 million litres (53% of total capacity) is leased to a private operator. The private and leased facilities are used by both the dealers and the government.

The key issues in the petroleum supply and distribution sub-sector in Rwanda are as follows:

• High international oil products prices and acquisitions costs;

• Unusually high margins charged by the oil companies;

• Lack of a proper legal framework;

• Doubtful quality and likely adulteration of petroleum products;

• Poor and unsafe handling and disposal of spent oils;

• Operation standards below acceptable levels;

• Safety and environmental issues due to lack of compliance and of adequate monitoring.

• High levels of public sector involvement (75% of all oil stored in Rwanda is government owned and the government owns and operates all depots except the depots at Kabuye that are now operated privately. The operator used to be Total-Rwanda but this business has recently been taken over by Engen. The Consultant was provided with some of the concession documentation but was not able to review the commercial arrangements in any depth.)

The Rwanda Revenue Authority has developed electronic systems for tracking all movements of imports from the borders and automatically relaying this information to the depots. Hence while smuggling used to be a major problem, the tax compliance system has been tightened up and this is no longer a pressing issue except perhaps near the border with the Democratic Republic of Congo.

11.2 Discussion and Recommendations

The first step in this project was therefore to review the policy in the petroleum sector and to assist the PSU to finalise a draft Petroleum Policy prepared by the Director of the PSU. A


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subsequent revision has now been adopted by the government, with one section removed (upstream), as primary responsibility for this vests in MININFRA not MINICOM.

The next item in the Terms of Reference was to review the management systems in PSU. Most of the PSU’s business including hydrocarbon accounting for stocks and the pricing determinations is conducted by means of specially constructed spreadsheets. The systems in place for receiving and accounting for Japanese grant oil, which is organised on an annual basis and which has not been renewed in 2008 and apparently not for 2009 as well, appear to be adequate, although there is evidence this was not properly managed in the past. Having said this, queries arise quite frequently on stocks as it borders on a commercial operation and an inordinate amount of time is spent by the Director of the PSU and his assistants in resolving these issues, which could be reduced by bespoke IT systems and proper records management. The procedures for re-sale of the oil delivered to Rwanda and held at storage depots whether or not it originates from the Japanese aid relies on a knowledge and judgement of the business practices of the potential traders and importers (to assure the government that they are not selling to “briefcase businessmen”), which is difficult to systematise but the rules should be set down in writing.

It is recommended that a manual be produced that sets out the procedures and rules for dealing in government stocks to aid transparency.

The overall system for international agreements for grant support from the Japanese government and oil procurement through London was investigated from the London end (the Crown Agents). It became evident during the project that the Japanese oil grant system was being discontinued and given that proper records were available, sorting out better management systems was not a priority.

A new national petroleum IT system is undergoing procurement through MININFRA and the Consultant was able to provide some comments on the information flows.

The most important task, and where most of the effort was spent, was on developing a draft Petroleum Law. This priority was set by the Permanent Secretary. The work involved collecting and analysing the downstream petroleum laws of nearby countries and best practice in the developed world, discussions with officials as to institutional responsibilities and the agenda for the Law, investigating possible approaches to licensing of various elements of the industry, and reviewing consistency with EAC practice. These discussions were not always straightforward as they involved unfamiliar concepts and difficult issues. It required a lot of drafting and each draft was accompanied by a presentation of the issues so that officials could understand why certain approaches were taken and also for use by the Management Committee of MINICOM. At the start of the final mission, drafts were agreed with PSU and the legal departments of MINCOM and MININFRA. The slightly revised draft that appears in Appendix D was agreed by the Permanent Secretary and Minster of MINICOM and is the version that has been sent out to industry and other Ministries for consultation so in effect is a Final Draft. Some of the potentially thorny issues, such as which bodies should act as Competent Authorities, have been left for promulgation by Regulation to smooth the approval path, as they could be contentious and could derail progress if powerful stakeholders fight their corner. Another example of where industry raised concerns is the length of licences – industry argues for a longer duration that is currently proposed. An area that requires further input from the Ministry of Justice is that of penalties. Once these matters are settled, the Law should be enacted and the implementing regulations recommended in this Report should be put in place as soon as possible.

The Consultant was asked to look at and recommend systems of petroleum standards. This was always an ambitious target, particularly in the circumstance where RBS is in very urgent need of capacity building. Basic resources such as equipment and staff capable of managing such standards and applying them are lacking, as is a cadre of inspectors competent to carry out basic inspections except on the metrology side (RBS implemented a project to check the calibration of all filling stations in 2008). Having said this, all the senior staff at RBS that the Consultant met are all keen and qualified to proceed with the programme. The Director General of RBS stepped down towards the end of the project and it was not possible to engage with the new executive to drive the work forward.


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All of the findings of this project, including a checklist for inspecting filling stations and an analysis of what is needed by way of standards have been given in hard copy and in electronic format to the Head of Standards at RBS as well as to MINICOM. Chapter 10 of this Report outlines the findings and Appendices A, B and C contain our detailed recommendations. These are fully compatible with previous recommendations from local high-level task forces at Ministerial level in Rwanda. The next step is for RBS to form technical committees to review these recommendations and to progress the adoption process for such standards, which as noted above will require serious capacity building and institutional development. It is crucial that this exercise is undertaken with the full buy-in of all stakeholders, especially industry.

Engaging the services of a mobile test laboratory to introduce some testing of road fuels in different centres around the country is a high priority.

The Terms of Reference asked for environmental procedures to be reviewed. The Consultant confirmed with the senior official responsible for this area in REMA that REMA has already put in place procedures whereby all filling stations now require an environmental impact assessment (EIA), a major concern of all previous task forces. (This has always been the legal position under old colonial licensing laws but has not been implemented). REMA is committed to preparing a set of guidelines for petroleum. REMA is liaising with PSU on the new Law. However full EIAs are now needed for the depots and REMA needs to move this work forward urgently. This will undoubtedly require capacity building.

An important theme is the interlinked matters of pricing and taxation. Since oil prices started to rise above historical levels in 2006/7, finding a means to protect vulnerable consumers has been a government priority. This has been achieved by a series of price control measures that disproportionately forego some tax and duty income rather than squeeze the industry players. The Consultant pointed out in his Interim Report why this has major adverse macroeconomic consequences. A more equitable price control system used in other countries was proposed to PSU but before any serious review was possible, the Ministry of Finance, the RRA and MINICOM embarked on a much needed initiative to harmonise pricing, taxation and tax compliance systems across the EAC and this is expected to replace the current price control system shortly. This new system should be finalised and put in place urgently. In the meantime international oil prices have fallen from the $146/ barrel peak to around the $70 to 80/ barrel level and the acute problems in Rwanda have been alleviated.

The Consultant was also asked to look at the possibility of arranging for some form of bulk purchasing of oil products as has developed in Kenya. The rationale is that instead of having lots of small packets of oil delivered it might be possible to arrange to have a single importer and gain economies of scale. This single importer would be selected on a competitive tender basis with regular retendering to avoid lock-in. The Consultant pointed out that the advantages of implementing such a scheme are likely to be small because of the volumes and that it stood the risk of that importer getting into financial trouble, as actually happened in Kenya, which caused chaos. However moving along this path would serve as a threat to the industry and the Consultant strongly supported the PSU’s initiative to write the possibility into the national Petroleum Policy and to unveil the proposal in the consultation process for the Petroleum Policy and the Petroleum Law. In support of this, the Consultant provided a substantial amount of data on gas oil and gasoline contracts and futures to the PSU in September 2009. It is almost certainly the case that current industry participants do not compete strongly enough on price and the threat of change might encourage greater efficiency. This threat of changing the industry structure should be maintained until such time as there is evidence of greater efficiency and more actual competition.


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11.3 National Policy Objectives

The project has made a contribution towards meeting the National Policy objectives as expressed in the Petroleum Policy, and as further summarised in the policy implementation matrix in Appendix E of this Report.

Objective 1 – Encourage Upstream Production

The section written on upstream development have been removed from the Petroleum Policy as it comes under MININFRA not MINICOM.

Aerial survey work has been taking place and the next stage is to carry out seismic work in high graded areas. If the seismic results are interpreted in the context of the geology as likely to be oil-bearing, then it will be necessary to set up a modern upstream licensing system to concession out blocks for exploration and to develop a fiscal regime that is sufficiently attractive to bring inward investment. Nearby Uganda is considered to contain one of the most exciting new oil and gas plays in Africa.

Objective 2 - Price Stabilisation Measures

The work by the task force drawn from Ministry of Finance, the RRA and MINCOM on pricing and taxation should come to fruition shortly and the recommendations should be implemented without delay.

Objective 3 – Introducing a New Legal framework

The present project has provided the groundwork for a new Law and regulations for downstream activities. This should provide a much tighter degree of control and better information for the government.

Objective 4 – Introducing Standards for Petroleum

Again, the present project has provided much of the groundwork for the adoption and implementation of international standards across the industry. A priority must be to introduce appropriate occupational health and safety standards as soon as possible.

Objective 5 - Safeguarding the Environment

REMA now requires EIAs for all new filing stations. There needs to be a rolling programme to achieve this for existing stations. All filling stations still require health hazard and safety policies. EIAs need to be carried out for depots. Guidelines on environmental issues need to be prepared and issued. REMA also needs to make sure that there are proper regulations for oil clean up, and for controlling and mitigating escapes to air or water from petroleum sites.

The introduction of appropriate standards (Objective 4) should also reduce the risk of incidents and environmental impacts.

The procedures within MININFRA for approval of large projects like depots or pipelines require full EIAs.

Objective 6 - Mechanisms to Mitigate Shortages

As identified in this Report, there is a pressing need to build more storage tanks, but this must be done by the private sector as the public sector already plays too large a role in the industry. Third party sites will need to be adequately recompensed for their financial and commercial risks. This


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may require a form of economic regulation. It will also require charging mechanisms that are more advanced than the current fees for the use of storage that take no account of the time that products are stored. We provided data on the likely costs of new storage. It is understood that at least one third party is discussing the possibility of investing in new storage with MININFRA.

Objective 7 - Reduce Dependence on a Single Route of Supply

Pending any upstream production in the region, PSU has made strides to facilitate the use of the Dar Es Salaam supply route through inter Ministerial dialogue with the other countries concerned and also working with industry. The southern route has been needed on several occasions since the present project started. There have been significant supply disruptions in Kenya following the elections and also when the bulk supplier became insolvent. Thus the route is now regarded as tested and operable at fairly short notice, although it is of course more expensive.

The other initiatives that are going on include an upgrading of capacity along the Mombasa – Eldoret Kenya Oil Pipeline. This has entailed a number of curtailments in capacity as equipment has been taken out of service for replacement and there have been reliability issues. For many years a pipeline connection between Eldoret and Kampala has been mooted and the contract has finally been awarded to Tamoil, a Libyan based company. The sooner this is in operation, the better from Rwanda’s point of view. Of course if Uganda is able to start producing oil in the next 5 years then the need for the connection between Kenya and Uganda changes. If there is no new refinery (which could take 10 years to plan and build) then the pipeline link may have to be used to flow crude oil in the opposite direction.

The US Trade and Development Agency has also sponsored some pre-feasibility work on a pipeline from Kampala through southern Uganda and on to Kigali (and possibly Burundi). Initial results look very positive but the engineering component to confirm routings and costs has now slipped by a year. The volumes assumptions underpinning the economics have been affected by the international financial crisis but the fundamentals remain sound.

Objective 8 – Promote the Use of LPG

This action to promote the use of LPG in lieu of fuel wood lies with MININFRA. MININFRA has let contracts to study the potential LPG market and also to introduce unified standards. The processes needed for the latter project will hopefully be a useful guide for RBS to go about adopting suitable petroleum standards.

Objective 9 - Enhance the Capacity of the PSU

Skills are scarce in Rwanda and there is a pressing need for human capacity development. This is especially the case for the PSU, which plays a pivotal role in the sector. The PSU has just lost a capable and experienced Director and while new junior staff are being appointed, the training and development needs for the unit as a whole must be reassessed and a human resource plan prepared.


Appendix A - 1 of 7

APPENDIX A – PETROLEUM CODES AND STANDARDS (UK)

SUMMARY OF UK/EU HSE REGULATIONS

AND INDUSTRY/BSI/ISO CODES AND STANDARDS

Note: some of these regulations and standards have been updated since 2001/2 when this research was originally performed for another DFID project but the principles and institutional structures still apply. This appendix has been included at the request of the Standards Director at RBS. RBS should check for any changes if they wish to use any of these standards. For completeness these lists contain ISO codes and standards, which will be readily available for adoption in Rwanda through the EAC.

Environmental

Environmental Impact Assessment regulations do not apply to fuel storage and filling stations, neither are they regulated under IPC or IPPC unless they are part of an oil refinery site.

The environmental aspects of fuel storage and filling stations are regulated by Local Authorities, for example vapour issues.

Principal Legislation

Environmental Protection Act 1990 ISBN 0 10 544390 5

Health and Safety

Enforcement responsibilities

Petroleum Licensing Authorities (PLAs) are responsible for enforcing:

• The issue of licences and licence conditions under the PETROLEUM

(CONSOLIDATION) ACT 1928 (see below – principal legislation);

• The unloading of petrol from road tankers at licensed premises under SECTIONS 2 to 8 of the HEALTH AND SAFETY AT WORK ETC. ACT 1974 (currently under review) (see below – principal legislation).

• The unloading of petrol from road tankers at licensed premises under REGULATION 25 and SCHEDULE 4 of the ROAD TRAFFIC (CARRIAGE OF DANGEROUS SUBSTANCES IN ROAD TANKERS AND TANK CONTAINERS) REGULATIONS 1992;

Local Authority Environmental Health Departments are responsible for enforcing:

THE HEALTH AND SAFETY AT WORK ETC. ACT 1974 at petrol filling stations and other local authority enforced premises EXCEPT FOR SECTION 6 (HSE responsibility) and SECTIONS 2 TO 8 (currently under review) when a road tanker is unloading petrol (PLA responsibility).

Health and Safety Executive (HSE) is responsible for enforcing:


Appendix A - 2 of 7

THE HEALTH AND SAFETY AT WORK ETC. ACT 1974 at premises other than those where it is the responsibility of the local authority. The HSE is responsible at sites, which come under the CONTROL OF INDUSTRIAL MAJOR ACCIDENT HAZARDS (CIMAH) REGULATIONS 1984, and the recent EU “Seveso II” Directive the CONTROL OF MAJOR ACCIDENT HAZARDS (COMAH). The HSE is the petroleum licensing and enforcing authority at sites which come under the NOTIFICATION OF INSTALLATIONS HANDLING HAZARDOUS SUBSTANCES REGULATIONS 1982, SECTION 6 of the HEALTH AND SAFETY AT WORK ETC. ACT 1974 at local authority enforced premises, except during the unloading of petrol from a road tanker (PLA responsibility).

Principal Legislation

PETROLEUM (CONSOLIDATION) ACT 1928 HMSO ISBN 0 11 803433 2.

The keeping of petrol is covered by the Petroleum (Consolidation) Act 1928. This Act requires that the keeping of petrol must be authorized by a license. Although the HSE has policy responsibility, enforcement, the issue of a license and the setting of any conditions attached to it are the responsibility of Petroleum Licensing Authorities (PLAs). In general, licensing authorities are the Fire and Civil Defence Authorities in the former Metropolitan Authorities; County Councils or Unitary Authorities elsewhere in England and Wales; and the Councils, Islands and Isles Councils in Scotland. However, licensing falls to statutory harbour authorities for harbour areas and to the HSE at any site which is subject to the Notification of Installations Handling Hazardous Substances Regulations 1982.

HEALTH AND SAFETY AT WORK ETC ACT 1974 HMSO ISBN 0 10 543774 3.

This Act places a general duty on employers to ensure the safety of both employees and other people from the risks arising from the work activity, so far as is reasonably practicable.

MANAGEMENT OF HEALTH AND SAFETY AT WORK REGULATIONS 1999 SI 1999/3242 HMSO ISBN 0 11 0856252.

These Regulations set more specific requirements on the management of health and safety. These include duties to introduce effective planning, organisation, control, monitoring and review, all based on an adequate RISK ASSESSMENT; appointment of competent persons; provision of information to employees and contractors; training; and procedures in the event of imminent danger. An Approved Code of Practice supports the Regulations.

Other legislation

Petroleum-Spirit (Motor Vehicles etc) Regulations 1929 SI 1929/952 ISBN 0 11 100195 1

Petroleum-Spirit (Plastic Containers) Regulations 1982 SI 1982/63 ISBN 0 11

026630 7

The Public Health Act 1961 (Section 73) ISBN 0 10 8502147 and the Civic Government (Scotland) Act 1982 (Section 94) ISBN 0 10 544582 7

Road Traffic (Carriage of Dangerous Substances in Packages etc) Regulations

1992 (* under review in 2001) SI 1992/742 ISBN 0 11 023742 0

Carriage of Dangerous Goods by Road and Rail (Classification, Packaging and Labeling) Regulations 1994 (* under review in 2001) SI 1994/669 ISBN 0 11 043669 5


Appendix A - 3 of 7

Safety Signs Regulations 1980 SI 1980/1471 ISBN 0 11 007471 8

Chemicals (Hazard Information and Packaging for Supply) Regulations 1994 (CHIP2) SI 1994/3247 ISBN 0 11 043877 9

Provision and Use of Work Equipment Regulations 1998 SI 1998/2306 HMSO ISBN0 110795997

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 SI 1995/3163 HMSO ISBN 0 11 053751 3

Control of Substances Hazardous to Health Regulations 1994 SI 1994/3246 HMSO ISBN 0 11 043721 7

Electricity at Work Regulations 1989 SI 1989/635 HMSO ISBN 0 11 096635 X

Factories Act 1961 HMSO ISBN 0 10 850027 6 and the Offices, Shops and Railway Premises Act 1963 ISBN 0 10 850111 6

Health and Safety (Enforcing Authority) Regulations 1998 SI 1998/494 HMSO ISBN 0 11 0656423

Workplace (Health, Safety and Welfare) Regulations 1992 SI 1992/3004 HMSO ISBN 0 11 034049 3

Electricity Supply Regulations 1988 (and Amendment 1990) SI 1990/390 HMSO ISBN 0 11 003390 6

Fire Precautions Act 1971 HMSO ISBN 0 10 544071 X

Safety Representatives and Safety Committees Regulations 1977 SI 1977/500 HMSO ISBN 0 11 070500 9

Codes and Standards

Safety and Environmental standards

ISO 14001 – Environmental Management Systems.

OHSAS18001 – Occupational health and Safety Management Systems

Institute Of Petroleum (now Institute of Energy) Codes

Code of practice for drivers' emergency actions on road loading racks 1st; February 1999. ISBN: 0 85293 234 0

Code of practice for the development of a response plan for serious incidents involving petroleum product road tankers 1989. ISBN: 0 85293 119 0

Code of practice for driver controlled deliveries to premises licensed for the storage of petroleum spirit 2nd; May 1994. ISBN: 0 85293 141 7

Environmental guidelines for petroleum distribution installations 1st ed; May 1996. ISBN: 0 85293 166 2

European model code of safe practice in the storage and handling of petroleum products. Part II: Design, layout and construction 1980 (reprinted 1990).

Guidance document on risk assessment for the water environment at operational fuel storage and dispensing facilities 1st; Dec 1999. ISBN: 0 85293 256 1

Guidance for the design, construction, modification and maintenance of petrol filling stations 1st; December 1999. ISBN: 0 85293 217 0


Appendix A - 4 of 7

Guidance for the design, construction, modification and maintenance of petrol filling stations - Electrical installations 1st; 2001. ISBN: 0 85293 315 0

Guidelines for investigation and remediation of petroleum retail sites 1st; Nov 1998. ISBN: 0 85293 216 2

Guidelines for uplift of product from retail filling stations and customers' tanks 1st ed.; 1994.. ISBN: 0 85293 146 8

Guidelines for the design and operation of gasoline vapour emission controls 2nd ed.; Oct 2000. ISBN: 0 85293 308 8

Guidelines on the environmental risk assessment for major installations handling hazardous substances 1st; 1997, Nov. ISBN: 0 85293 202 2

Model safe loading pass scheme 1st ed.; 1995. ISBN: 0 85293 153 0

Performance specification for underground pipework systems at petrol filling stations 2nd ed.; Feb 2001. ISBN: 0 85293 323 1

Sector application guide for ISO 14001: for the marketing & distribution of petroleum products 1st ed; Sept 1997.. ISBN: 0 85293 193 X

VOC emissions control guidance -. ISBN: 0 85293 214 6

Model Code: the maintenance of road tankers used for the conveyance of petroleum fuels 1st; October 2000. ISBN: 0 85293 305 3

Model Code of Safe Practice for the Petroleum Industry Part 2: Design, construction and operation of distribution installations 1st ed.; Sept 1998. ISBN: 0 85293 204 9

Model Code of Safe Practice for the Petroleum Industry Part 15: Area classification code for petroleum installations 1st; 1990.. ISBN: 0 471 92160 2

Model Code of Safe Practice for the Petroleum Industry Part 18: Occupational health 1993.. ISBN: 0 471 94268 5

Model Code of Safe Practice for the Petroleum Industry Part 19: Fire precautions at petroleum refineries and bulk storage installations 1st ed.; 1993. ISBN: 0 471 94328 2

Model Code of Safe Practice for the Petroleum Industry Part 21: Guidelines for the control of hazards arising from static electricity 1st ed.,; March 1998. ISBN: 0 85293 205 7

Petroleum road tanker design and construction 1st; May 1999. ISBN: 0 85293 241 3

Application of Control of Substances Hazardous to Health (COSHH) requirements for carcinogens at oil refineries and terminals 1st; August 1998. ISBN: 0 85293 233 2

BSI

BS 2654:1989 Specification for manufacture of vertical steel welded non-refrigerated storage tanks with butt-welded shells for the petroleum industry

BS EN 976-1:1997 Underground tanks of glass-reinforced plastics (GRP). Horizontal cylindrical tanks for the non-pressure storage of liquid petroleum based fuels. Requirements and test methods for single wall tanks


Appendix A - 5 of 7

BS EN 976-2:1997 Underground tanks of glass-reinforced plastics (GRP). Horizontal cylindrical tanks for the non-pressure storage of liquid petroleum based fuels. Transport, handling, storage and installation of single wall tanks

97/123629 DC Underground tanks of glass-reinforced plastics (GRP). Horizontal cylindrical tanks for the non-pressure storage of liquid petroleum based fuels. Part 4. Transport, handling, storage and installation of double wall tanks (prEN 976-4)

97/123630 DC Underground tanks of glass-reinforced plastics (GRP). Horizontal cylindrical tanks for the non-pressure storage of liquid petroleum based fuels. Assessment of conformity to EN 976-1 and EN 976-3 (prEN 12917)

97/123631 DC Underground tanks of glass-reinforced plastics (GRP). Horizontal cylindrical tanks for the non-pressure storage of liquid petroleum based fuels. Part 3. Requirements and test methods for double wall tanks (prEN 976-3)

98/126077 DC (prEN 13341). Requirements and test methods for thermoplastic tanks made from blow moulded polyethylene, rotational moulded polyethylene and anionic polymerization of polyamide 6 for the above ground storage of domestic heating oils and diesel fuels

00/715014 DC prEN 13617-3. Petrol filling stations. Part 3. Construction and performance of shear valves

99/710619 DC prEN 13616. Overfill prevention devices for static tanks for liquid petroleum fuels

ISO

ISO 1998-5:1998 Petroleum industry -- Terminology -- Part 5: Transport, storage, distribution

ISO 1998-6:1998 Petroleum industry -- Terminology -- Part 6: Measurement

ISO 1998:1998 Road vehicles -- Determination of fuel leakage in the event of a collision

ISO 3183-1:1996 Petroleum and natural gas industries -- Steel pipe for pipelines -- Technical delivery conditions -- Part 1: Pipes of requirement class A

ISO 3183-2:1996 Petroleum and natural gas industries -- Steel pipe for pipelines -- Technical delivery conditions -- Part 2: Pipes of requirements class B

ISO 3183-3:1999 Petroleum and natural gas industries -- Steel pipe for pipelines -- Technical delivery conditions -- Part 3: Pipes of requirement class C

ISO 7507-1:1993 Petroleum and liquid petroleum products -- Calibration of vertical cylindrical tanks -- Part 1: Strapping method

ISO 7507-2:1993 Petroleum and liquid petroleum products -- Calibration of vertical cylindrical tanks -- Part 2: Optical-reference-line method

ISO 7507-3:1993 Petroleum and liquid petroleum products -- Calibration of vertical cylindrical tanks -- Part 3: Optical-triangulation method

ISO 7507-4:1995 Petroleum and liquid petroleum products -- Calibration of vertical cylindrical tanks -- Part 4: Internal electro-optical distance-ranging method

ISO 7507-5:2000 Petroleum and liquid petroleum products -- Calibration of vertical cylindrical tanks -- Part 5: External electro-optical distance-ranging method

ISO/TR 7507-6:1997 Petroleum and liquid petroleum products -- Calibration of vertical cylindrical tanks -- Part 6: Recommendations for monitoring, checking and verification of tank calibration and capacity table


Appendix A - 6 of 7

ISO/TR 13387-1:1999 Fire safety engineering -- Part 1: Application of fire performance concepts to design objectives

ISO/TR 13387-2:1999 Fire safety engineering -- Part 2: Design fire scenarios and design fires

ISO/TR 13387-3:1999 Fire safety engineering -- Part 3: Assessment and verification of mathematical fire models (available in English only)

ISO/TR 13387-4:1999 Fire safety engineering -- Part 4: Initiation and development of fire and generation of fire effluents

ISO/TR 13387-5:1999 Fire safety engineering -- Part 5: Movement of fire effluents

ISO/TR 13387-6:1999 Fire safety engineering -- Part 6: Structural response and fire spread beyond the enclosure of origin

ISO/TR 13387-7:1999 Fire safety engineering -- Part 7: Detection, activation and suppression (available in English only)

ISO/TR 13387-8:1999 Fire safety engineering -- Part 8: Life safety -- Occupant behaviour, location and condition.

Health and Safety Executive Guidance - HS(G)176 The storage of flammable liquids in tanks

HS(G)176 replaces both:

• HS(G)50 The storage of flammable liquids in fixed tanks (up to 10 000 m3 total capacity)

and

• HS(G)52 The storage of flammable liquids in fixed tanks (exceeding 10 000 m3 total capacity).

Note that HS(G)51 deals with small quantities of flammable liquid (less than 1000 litres) in portable containers and drums.

HS(G)176 gives guidance on the design, construction, operation and maintenance of installations used for the storage of flammable liquids in fixed tanks operating at or near atmospheric pressure. It applies to new installations and to existing installations where reasonably practicable. It is relevant to industries such as chemical, petrochemical, paints, solvents and pharmaceutical.

The guidance gives help in the assessment of the risks arising from the storage of flammable liquids, and it describes measures to control those risks. The main control measures are identified as:

• containment (primary and secondary);

• separation;

• ventilation;

• substitution;

• control of ignition sources (see BS 5345) and advice on hazardous area classification in BS EN 60079-10 : 1996 or IP Code of Safe Practice in the Petroleum Industry Part 15).

HS(G)176 provides a comprehensive guide to the standards, which should be used when considering the storage of flammable liquids in tanks. Some of the principle standards are:

• Design standards for tanks may include BS 2594 : 1975, BS 2654 : 1989 BS 4994 : 1987, prEN 265001, prEN 976.


Appendix A - 7 of 7

• Corrosion protection standards include BS 5493, BS 3416, BS 6949.

• Advice on foundations for vertical storage tanks is given in BS 2654.

• Pipework to and from tanks should be constructed to ANSI B31.3, which is supported by EEMUA supplement 153, with supports to BS 3974.

• Valves should be fire-safe to BS 6755, and the need for ROSOVs should be assessed.

• Lightning protection is dealt with by BS 6651 : 1992.

• Sizing of pressure control devices and emergency relief venting should be to BS 2654 or API 2000.

• Fire protection is dealt with by BS 5908 : 1990.

It is emphasised that this HS(G)176 identifies a large number of other standards and sources of good industry practice, and is regarded as an essential document when considering technical measures relating to the storage of flammable liquids in tanks

BS 5908 : 1990 - Code of practice for fire precautions in the chemical and allied industries

This standard gives guidance on the nature of fire hazards in the chemical and allied industries.

BS 5908 has been proposed for withdrawal, but remains current.

The code covers plant design, siting and layout, control and maintenance aspects of plant and the design and operation of warehouses and storage areas. Specific consideration is given to fire prevention and fire fighting.

The code provides useful information on many topics including:

• relevant legislation;

• principles of ignition and fire spread;

• site selection and layout (including access for fire fighting, water supplies, drainage and segregation);

• fire precautions for buildings and structures;

• storage and movement;

• design.


Appendix B - 1 of 49

APPENDIX B – DISTILLATION OF STANDARDS IN THE FORM OF A CHECKLIST



CHECKLIST QUESTIONNAIRE ON PETROL FILLING STATION AND STORAGE SITE TANKAGE

NB. Yes No Delete which ever is NOT applicable REMARKS 1 Has a Hazardous Area Classification assessment been carried out and is a site plan

available showing the Hazardous Areas? Yes No

2 Has approval for building the petrol station/storage site been granted from the local authorities and are the approval documents available?

Yes No

3 Is a "As Built" site plan available? Yes No 4 Underground tankage - How many tanks on the:

a. "As Built" Site plan? No:- …….. b. Physically on the site? No:- ……..

The capacity details of each tank.

5 Tank Construction:- a. Double skin tank Yes / No Steel with corrosion inhibitor coating - OR -

Glass Reinforced Plastic How many

tanks No.:

b Single skin tank Yes / No Steel with corrosion inhibitor coating - OR - Glass Reinforced Plastic

How many tanks

No.:

6 Are tank manufacturers Certificates of Conformity available for each tank? Yes No 7 What backfill material was used during installation of the tanks? 8 When were the tanks constructed? (Manufacturers certificate). Date: ……./..…./…... 9 When were the tanks last inspected? (Tank maintenance records) Date: ……./..…./…... 10 When were the tanks last pressure tested? (Test result records) Date: ……./..…./…... 11 Aboveground Tank age - How many tanks on the: a. "As Built" Site plan? No:- …….. b. Physically on the site? No:- ……..

The capacities details of each tanks

12 Tank Construction:- a. Double skin tank Yes / No Steel with corrosion inhibitor coating - OR -

Glass Reinforced Plastic How many

tanks No.:

b Single skin tank Yes / No Steel with corrosion inhibitor coating - OR - Glass Reinforced Plastic

How many tanks

No.:

13 When were the tanks constructed? (Manufacturers certificate). Date: ……./..…./…... 14 When were the tanks last inspected? (Tank maintenance records) Date: ……./..…./…... 15 When were the tanks last hydrostatic-pressure tested? (Test result records) Date: ……./..…./…... 16 Are tank manufacturers Certificates of Conformity available for each tank? Yes No 17 Aboveground Tankage Bund Area: a. Is the bund area clean? Yes No b. Any sign of product leaks or spillages? Yes No c. Is the bund sump valve /drain valve closed and locked securely? Yes No d. When was the bund last drained? Date: ……./..…./…... e. Does the bund drain into an oil separator? Yes No 18 How is tank wet-stock / contents measured? a. Manually via dipsticks? Yes No b. When was the calibration of the dipsticks last checked? Date: ……./..…./…... c. Is there a Tank gauging system? Yes No d. Details of the tank gauging system:-

(Manufactures name)

e. When is the Petrol station/storage site wet-stock reconciled?

Once a day Twice a day Weekly Monthly

f. What is the average storage loss or gain per grade per month?



19 Additional Environmental Checks Environmental Check Auditors Notes

a. Are storage facilities designed to minimise routine emissions to the environment, minimise the risk of accidental emissions and spillages and minimise the impact of any emissions/spillages that do occur?

b. Check adequately designed and maintained bonding on liquid storage tanks. Check fugitive emissions e.g. from bulk tanks. Check how vented or overflowing material is handled (e.g. tank overfilling, over pressure). Check systems for the prevention of leakage/spillage e.g. high pressure, high level alarms. Check possibility of surface and groundwater contamination from storage facilities on drainage plans.

c. Is there a programme for the detection and control of losses from underground tanks? Corrosion prevention? Integrity testing? Soil/groundwater sampling?

d. Is transfer, product handling and dispensing equipment designed and maintained to minimise fugitive emissions and leakage? Specification and maintenance of pipes, pumps, valves, transfer hoses etc.?

e. Are underground pipelines designed and maintained to minimise leakage and failure? Corrosion prevention, integrity testing, pressure alarms, ESD valves?

f. Are measures taken to minimise the probability of on-/off-site pollution events, e.g. inspection of vehicles carrying products on-and off-site?

g. Are tanks and storage systems designed to minimise discharges to air and water? Vented vapour control, overfill prevention, emergency shutdown and initial spill response?

h. Are systems in place to measure losses from underground equipment? Leak detectors/pressure drop alarms? Surface water/soil/groundwater sampling? Appropriate remedial action?

i. Is routine and preventative maintenance carried out on all plant and equipment in accordance with formal procedures and maintained in accordance with the supplier/manufacturer's recommendations?



CHECKLIST QUESTIONNAIRE ON PETROL FILLING STATION/STORAGE SITE PIPEWORK, DISPENSERS, DRAINAGE

NB. Yes No Delete which ever is NOT applicable REMARKS 1 Are all the fill pipes correctly labeled with the number, grade and working capacity of

the tank to which they are connected. Yes No

2 Has all the associated pipe work to the tankage and from the tanks to the dispensers been tested for their integrity? (Test result records)

Yes No

Petrol Pump Dispensers: Petrol Station (For a Storage Site assess any dispensing/transfer systems using this checklist)

3 a. Are the dispensers Mechanical OR Digital? b. Is the dispensing system via: i) suction pumps ii) submersible

pumps iii) remote

pumps iv) gravity fed

system c. When were the petrol dispensers last calibrated? (calibration certificates) Date: ……./..…./…... d. When was the last maintenance service carried out on the dispensers?

(maintenance records) Date: ……./..…./…...

4 Are the appropriate number of fire extinguishers with the correct fire fighting media situated close to the dispensers?

Yes No

Drainage System - Petrol Station (For a Storage Site assess any transfer systems using this checklist)

5 Tanker delivery position: a. Is containment possible? Yes No b. Is the surface quality impermeable? Yes No c. Is Drainage routing via separator? Yes No 6 Pump Island fill positions: a. Is containment possible? Yes No b. Is the surface quality impermeable? Yes No c. Is Drainage routing via separator? Yes No 7 Under the canopy: a. Is containment possible? Yes No b. Is the surface quality impermeable? Yes No c. Is Drainage routing via separator? Yes No 8 Has there been any record of contaminated water course surrounding the petrol

filling station/Storage Site? (This question should be directed to the local authority offices).

Yes No

9 When was the oil separator tank(s) last cleaned? (Maintenance records) Date: ……./..…./…... 10 Who cleaned the oil separator and how and where were

the contents disposed?

11 Are the Petrol Station "Petroleum Delivery Certificates" available for review? Yes No Auditors Notes:



CHECKLIST FOR VISUAL INSPECTION OF ELECTRICAL INSTALLATIONS UNDER VERIFICATION PROGRAMME 2

This list should not be considered as exhaustive and may vary from installation to installation. Inspection will involve checking the following items relevant to the installation and may also involve using tools to check tightness and gaps: NB. ! " Delete which ever is NOT applicable REMARKS 1 Confirm presence of records, diagrams and schedule information. ! " 2 Petrol filling station/Storage Site electricity supply intake. ! " 3 Earthing connections and bonding. ! " 4 Presence of lightning protection. ! " 5 Methods of protection against direct and indirect contact. ! " 6 Presence of test socket outlet adjacent to supply intake (non-hazardous area). ! " 7 Main switchboard and distribution boards/circuit labeling. ! " 8 Labeling of circuits, fuses, switches and terminals. ! " 9 Presence of appropriate devices for secure isolation and switching. ! " 10 Isolators capable of being locked in the ‘off’ position. ! " 11 Choice and setting of protective and monitoring devices. ! " 12 Pump/transfer system console and controls. ! " 13 Correct connection of socket outlets, lamp holders and other accessories. ! " 14 Single pole devices for protection or switching in phase conductors only. ! " 15 Ancillary equipment — luminaries, socket outlets, portable and transportable equipment. ! " 16 Selection of equipment and protective measures appropriate to external influences. ! " 17 Identification and connection of conductors. ! " 18 Selection of wiring systems and conductors for current carrying capacity and voltage

drop. ! "

19 Routing of cables. ! " 20 Presence of fire barriers and protection against thermal effects. ! " 21 Integrity of petrol and petrol vapour barriers in ducts etc. where applicable. ! " 22 Presence of signs, labels and other warning notices. ! " 23 Lighting (e.g. enclosures and seals). ! " 24 Serviceable lamps of correct types and rating. ! " 25 Apparatus is suitable for environment and correctly labeled. ! " 26 Damage to apparatus or wiring systems, which might impair safety. ! " 27 No unauthorised or unrecorded modifications. ! " 28 Details of other items of non-compliance. ! " 29 Additional checks for all hazardous area equipment and components (this does not refer

only to dispensing equipment): ! "

(i) name plate details - accredited certification mark, certificate standard number (e.g. Dispensing equipment BS 7117: Part 1 or equivalent standard);

! "

(ii) explosion protection suitable for zone of installation; ! " (iii) correct temperature classification; ! " (iv) appropriate apparatus group or subgroup; ! " (v) correct circuit identification; ! " (vi) maintenance of integrity of enclosures; ! " (vii) cable glands, entries and stoppers etc. complete and appropriate to the

enclosure; ! "

(viii) electrical connections are tight; ! " NB. ! " Delete which ever is NOT applicable REMARKS (ix) satisfactory earthing, bonding etc.; ! " (x) correct rating of apparatus and components; ! " (xi) adequate environmental protection, e.g. against weather, mechanical damage. ! "

Note: Items are not listed in any order of priority. Where integrity of type of protection is dependent on electrical



protection, this should be verified initially. Auditors Comments :



CHECKLIST FOR PERIODIC VISUAL INSPECTION OF ELECTRICAL INSTALLATIONS UNDER VERIFICATION PROGRAMMES 3,4,5 AND 6

An inspection program should be carried out to ensure that the electrical installation and equipment in hazardous areas continues to be in satisfactory condition. The first action of periodic verification is to determine whether or not adequate site electrical records including diagrams, schedules of equipment, previous test results and other relevant information are present on site.

In this case, adequate diagrams, schedules of equipment and test results etc., should be created for future reference and to assist in completion of the Certificate. Inspection will involve checking the items (2) to (29) listed above together with the additional items for hazardous area equipment listed below, as relevant to the installation (see also Hazardous Areas Check List (a) – (s) inclusive) This may involve using tools to check tightness and gaps. Additional checks of factors affecting integrity of apparatus, systems and installations (this does not refer only to dispensing equipment) in hazardous areas:

NB. ! ! Delete which ever is NOT applicable Remarks i) corrosion of enclosures, fixings, cable entries etc. ! ! ii) undue accumulation of dust, dirt or rubbish (leaves, paper etc.) ! ! iii) loose electrical connections, including those for earthing, bonding etc. ! ! iv) loose fixings, glands, conduit, stoppers etc. ! ! v) condition of enclosure gaskets, seals and fastenings ! ! vi) leakage of fuel, oil or compound ! ! vii) wear or undue running noise of pump motor bearings (external check only, e.g.

lateral movement of shaft or signs of overheating) ! !

viii) inadvertent contact between moving and fixed parts ! ! ix) integrity of guards ! ! x) incorrect rating or type of lamp or unserviceable lamps ! ! xi) undue vibration ! ! xii) malfunction of relays and protective devices ! ! xiii) unauthorised or undocumented repairs, adjustments or modifications (including

‘add-ons’) ! !

xiv) accessible duct/pipe seals appear satisfactory ! ! xv) presence of air-moving equipment too near to hazardous zones ! ! xvi) maintenance appears to be adequate and properly documented, or inappropriate

maintenance, e.g. not in accordance with manufacturer’s recommendations. ! !

Note: Items are not listed in any order of priority. Where integrity of type of protection is dependent on electrical protection, this should be verified initially. Inspection of dispensing equipment will reveal whether or not the equipment has been constructed and certified in compliance with BS 7117: Part 1:1991 or an equivalent standard providing means for disconnecting circuit conductors for testing. Auditors Comments:



HAZARDOUS AREA CLASSIFICATION

GENERAL The safe development and operation of a petrol filling station depends primarily on a competent assessment of the likelihood of flammable or explosive atmospheres being present during operations and the need to prevent, as far as possible, such atmospheres reaching sources of ignition. The concept of hazardous area classification and zoning for fixed electrical equipment set out in BS EN 60079, Electrical equipment for explosive gas atmospheres, should be followed for all activities covered by this guidance. All sources of ignition, including those associated with sparks of any sort, hot surfaces of equipment, etc. should be excluded from hazardous areas or, in the case of electrical equipment, specially protected. This includes both fixed and portable equipment.

HAZARDOUS ZONE DEFINITIONS Basic definitions BS EN 60079-10: 1996 (Electrical equipment for explosive gas atmosphere). Zone 0 in which an explosive gas-air mixture is continuously present, or present for long periods; Zone 1 in which an explosive gas-air mixture is likely to occur in normal operation; Zone 2 in which an explosive gas-air mixture is not likely to occur in normal operation and, if it occurs, it will exist only for a short time. The areas outside these zones are defined as non-hazardous. Examples of hazardous zones The guidance obtained from suppliers of the equipment involved, will assist in determining the extent of the various zones. In compiling the Table, regard has been paid to operational factors peculiar to petrol filling stations (e.g. free access of members of the public and their motor vehicles). Consequently, the extent of some of the zones may be different from those that would apply at a petroleum installation where operational factors (e.g. access limited to appropriately trained persons) are different. This is consistent with the approach recommended in BS EN 60079-10, 1996, which describes a method of carrying out an area classification procedure. Local site conditions may mean that the extent of zones will vary in individual cases, and each site needs to be considered separately. In particular, the horizontal distances quoted for Zone 2 areas will depend on the likely wetted area of a liquid spillage, and this will vary with paving and drainage conditions and the degree of containment from walls and other obstructions. Also, if a location apparently falls within two zones, that location is to be regarded as being in the zone with the higher risk. Further guidance on estimating the extent of hazardous areas is contained in the Institute of Petroleum’s Model Code of Safe Practice Part 15: Area classification.



Hazardous area classification

Facility Location of hazardous zone Area Class Within any tank and within any manhole chamber in which there are either direct or off-set fill tanker delivery hose connection points, or vapour connection points.

Zone 0

Within any manhole chamber not containing tanker delivery hose or vapour connection points.

Zone 1

Underground storage tanks

For all tank filling connections, (including above ground off-set fill points and any vapour connection) vertically for 1.25 m above forecourt level, extending horizontally for 3 m and coming down to forecourt level at a radius of 4 m from the connections.

Zone 2

Within a radius of 3 m in all directions of the open end of any vent pipe.

Zone 1 Vent pipes for underground storage tanks without vapour recovery The area below the Zone 1 area of the vent pipe, for a radius of 3 m around

the discharge point and down to ground level.

Zone 2

Vent pipes for underground storage tanks with vapour recovery emission control

Within a radius of 2 m in all directions of the open end of any vent pipe and extending vertically down to ground level.

Zone 2

Vent pipes for separators Within a radius of 300 mm in all directions of the open end of any vent pipe.

Zone 2

Dispensing equipment Within 200 mm horizontally from the dispenser and extending vertically to 50 mm above the top of the dispenser or up to the top of the hydraulic housing where a vapour barrier is fitted;

Zone 2

Within 750 mm horizontally of any sight glass and extending vertically from 150 mm above the sight glass down to ground level;

Zone 2

Within the metering pump/dispenser housing and enclosed spaces directly connected to it.

Zone 1

Within the nozzle spout housing and within 100 mm in all directions of the nozzle spout housing.

Zone 0

Air separator vent. Horizontally within a radius of 250 mm from any external vent and extending vertically from the ground to 100 mm above the vent.

Zone 1

Around nozzle provided with Stage 2 Vapour Recovery and withdrawn from nozzle housing: a truncated cone of height 1.2 m and with a radius of 500 mm at ground level and 200 mm at the top. Note: This cone can arise during use at all positions where the dispenser nozzle might be expected to reach in normal operation.

Zone 2

Dispensing equipment

Around nozzle without Stage 2 Vapour Recovery and withdrawn from nozzle housing: as above but with an additional Zone 1 area up to a height of 250 mm at ground level. Note: This cone can arise during use at all positions where the dispenser nozzle might be expected to reach in normal operation

Zone 2 & Zone 1



Facility Location of hazardous zone Area Class Within any enclosure around the pump.

Zone 1 Remote pumps

Within 3 m horizontally coning downwards to 4m at forecourt level of the center line of the remote pump housing and vertically to the top of the hydraulic housing with a minimum height of 1.25m

Zone 2

Screwed or flanged joints in above ground pipe-work

A cylinder 1 m in diameter centered on the joint extending from 1 m above the joint to ground, unless the pipe is in an enclosed or essentially enclosed space, in which case it is the entire space.

Zone 2

Within 0.3 m of the shell of the tanker extending vertically down to ground level;

Zone 1

Where tanker compartments are being dipped, within 1 Zone 1 m horizontally of the center of any tanker top opening and extending vertically for 2 m above the tanker shell;

Zone 1

Road tankers parked for unloading

Within a horizontal radius of 2 m from tanker discharge and any vapour recovery connections and vertically for 1.25 m above ground level, coning down to ground level at a radius of 4 m from the tanker discharge connections.

Zone 2

Buildings

Kiosks and other small buildings with openings in a hazard zone.

The appropriate zone at the same height throughout the building.

Pit, trenches etc. Any pit, trench or depression below ground wholly or partly in a Zone 1 or Zone 2 area.

Zone 1



Hazardous Area Classification for Underground Tanks



Hazardous Areas Classification for Road Tankers



TANKAGE

GENERAL Tanks for petroleum products should provide a safe means for the storage of a potentially dangerous and highly polluting liquid. They should, so far as is reasonably practical, be protected against accidental damage, malicious attack or environmental degradation. Tanks may be located above or below ground; special precautions will be necessary in each case to ensure the continued safety of the installation. Planning Underground tanks, so long as they retain their integrity, provide a safe method for such storage and this has traditionally been the preferred method for storing petrol at filling stations. However, they have a history of leaking, often for long periods of time before signs of contamination or pollution at locations outside the site boundary indicate the existence of a problem. The main cause has been corrosion of the tank shell, creating pinholes that gradually increase in size. The onset of such corrosion is unpredictable and the detection of the initial stages of a leak almost impossible without sophisticated detection devices. Special precautions are necessary for the protection and security of underground tanks. It is for this reason, together with increased concern for the environment, that the industry developed the double skin storage tank which allows easier detection of leaks and helps prevent leaked product escaping from the site. The above ground storage of petrol facilitates visual examination of the tank shell but brings with it an increased risk of fire and explosion requiring the adoption of special control measures appropriate to any particular installation based on a risk assessment. Above ground storage of petrol at filling stations is a relatively new concept in the UK; careful design by specialists and close liaison with all the relevant authorities will be necessary. Essential requirements for storage tanks Tank systems should be designed, constructed and installed so as to provide protection to the public and the environment against any release of product. When properly installed the complete system should retain its integrity for the entire duration of its design life. The essential performance requirements for tank installations should include the following:

(a) Tanks susceptible to corrosion or other degradation: • the means to contain any uncontrolled release of product; • the means to detect any perforation of the shell; • adequate protection against damage during installation and operation.

(b) Tanks not susceptible to corrosion or other degradation: • the means to detect any uncontrolled release of product; • adequate protection against damage during installation and operation.

Some of the factors to be taken into account are: — protection during transport to site; — offloading and storage on site; — means of installation; — operational and superimposed loading; — anchorage against upthrust due to buoyancy; — degradation due to corrosion, chemical action or fuel incompatibility. Underground tanks should, so far as is reasonably practical, be installed in such a way as to facilitate easy removal at the end of their operational life without jeopardizing the safety or integrity of adjacent tanks. Types of tank There are a variety of types of storage tanks available for use both above and below ground. Tanks are generally cylindrical and installed horizontally. Some above ground tanks may be mounted vertically and they may also be slab sided with flat bottoms and flat or domed tops. Tanks are commonly manufactured from steel, glass reinforced plastic (GRP) or using a combination of steel and plastic or GRP. They may be single skin or double skin depending on the type and construction and the intended use. The risks arising from a loss of integrity will vary with the circumstances at each site and the selection of the appropriate type of tank should be determined from an assessment of the risks both to the safety of people and of polluting the environment. Approvals and compliance



At the time of drafting this document the following Standards are available which cover some of the types of tanks used at filling stations:

Single Skin Steel tanks: prEN 12285 Double Skin Steel Tanks: prEN 12285 Single Skin Glass Reinforced Plastic Tanks: BS EN 976-1, 976-2, 977 and 978 Double Skin Glass Reinforced Plastic Tanks: prEN 976-3 and 976-4

Any tank using other types of construction or materials should provide an appropriate level of safety and environmental protection based on an agreed assessment of the risks appropriate to a particular installation for the lifetime of that installation. The tank manufacturer should demonstrate compliance with essential requirements of the Construction Products Directive and products used should be fit for the purpose.

Certificate of conformity All tanks should have a Certificate of Conformity supplied by the manufacturer to confirm compliance with the requirements of the appropriate EN standard. Where there is no appropriate standard, the manufacturer should supply a Certificate indicating to what standard it has been manufactured. The certificate may include details of Class, Certifying Authority’s approval number, client, job number and site. It should also have test operation results identifying nominal capacity, material grade, number of compartments and their capacity, pressure test of tank, pressure test of skin, exterior finish, interior finish, thickness of any exterior protective coating, interstitial space volume, and be signed on behalf of the manufacturer. Tanks are normally supplied with provision for the connection of fill, vent, discharge and vapour return lines as well as contents measurement, testing, leak detection, overfill prevention and an inspection or entry cover. The actual connections form an integral part of the overall design of the pipe-work systems.

UNDERGROUND TANKS The installation of tanks underground has been found to provide a safe environment for the storage of petrol. It reduces the risk of fire and explosion and allows uninterrupted space at ground level. It is, however, difficult and expensive to inspect the tank to check for degradation so that any leak, unless contained, will contaminate the surrounding ground. Typical installations for steel and GRP tanks are shown at the end of this section. Types of tank When choosing the type of tank for underground service it is important to recognise that there are two interrelated factors that must be considered, first the configuration of the tank, i.e. whether it is to be single or double skin, and secondly what materials are to be used in the construction. An appreciation of the various materials is given in below.

Single skin tanks, which can be constructed in any of the materials set out below, pose a potential threat to safety and the environment since if a leak occurs, product will already have been released into the ground before the loss is noticed. Such a release can be safely and securely contained within a defined area on the site by creating some form of secondary containment such as a vault, membrane or impervious clay layer. However, such a solution would only be appropriate in a location that is not sensitive to any such release.



Double skin tanks, which can be constructed in any of the materials set out below, provide added protection because of the ability to contain any release of product from the primary tank shell and, in addition, allow the inclusion of a monitoring system which will indicate a failure of either skin. Properly installed and maintained, they pose a very low threat to safety or the environment.

Steel Steel tanks are prone to corrosion and subsequent failure, although coatings do offer some protection. For single skin steel tanks, the integrity of the coating is of paramount importance. For double skin steel tanks, the inner skin and inside of the interstitial space remain unprotected. Corrosion inhibitors should always be incorporated in any liquids introduced into the interstitial space and should comply with the requirements of prEN 13160, the draft standard for leak detection systems.

Tanks manufactured to BS EN Standards will be supplied with an appropriate external coating to protect against corrosion. The degree of protection offered, and therefore the operational life of a steel tank, depends on the quality of the coating and its integrity. Cathodic protection may also be used to provide added protection.

Glass reinforced plastic Tanks constructed of GRP do not fail due to corrosion, but their performance relies particularly on their design and the quality control of the manufacturing process. Tanks to be used for the underground storage of petroleum products should be manufactured to comply with the requirements of BS EN 976, which specifies two different types of tank requiring different installation standards.

Inadequate installation or unexpected ground movement may impose abnormal loads on the tank. In extreme conditions, generally coupled with manufacturing defects, this can lead to excessive stress concentrations that can cause catastrophic failure of the tank shell.

Composite Tanks manufactured from composite materials are intended to combine the best qualities of the traditional steel and the later GRP tank, providing the strength and resilience of the former and the corrosion and degradation resistance of the latter. They may be single skin or double skin, and the necessity for any additional protection measures will be determined from a consideration of the risks to safety or the environment at a particular location and the properties of the composite tank itself. Corrosion protection Metal tanks are generally protected against corrosion by the application of an external protective coating. Such coatings are specified for tanks complying with BS EN 12285. Coatings should be inspected for damage and may be tested for thickness and continuity prior to installing the tank. Any damage should be made good in accordance with the manufacturer’s instructions.

Corrosion control can also be provided by cathodic protection in which sacrificial anodes are used. The anodes are normally magnesium or zinc and details of the necessary type and size should be sought from the tank manufacturer. Tanks protected in this way should be electrically isolated from pipe-work and conduit through use of isolation bushings or flanges. It must be recognised, however, that metalwork on either side of such isolation bushings may be at different electrical potentials and such actions should be discussed and agreed with the electrical designer to ensure that an unsafe condition cannot arise. A method of testing to confirm the continued effectiveness of the system should be provided.

Alternatively, corrosion control can be provided using an impressed current system. Electrical currents from such systems can influence other nearby metallic structures, which are not a part of the protected system. Proper design by a competent corrosion engineer is required to prevent adverse effects on adjacent above ground tanks, utilities and other metallic structures. This should be carried out by a competent corrosion engineer working in close liaison with the electrical designer and the manufacturers of any equipment installed within or on the tanks, e.g. leak detection or tank gauging systems. The most effective corrosion protection is provided when high quality coatings and an appropriate cathodic protection system are used in combination.



Installation of underground tanks Proper installation is essential to ensure the continued operational safety and effectiveness of the tank for the duration of its design life. The following paragraphs give guidance on the methods and precautions to be taken in this regard.

Typical installation details for double skin steel tanks and single skin GRP tanks are shown in the following diagrams. Preparation The sub-soil conditions should be examined in order to determine any special precautionary work, which might be necessary to reduce the possibility of structural failure.

Foundations for underground tanks should support the tank securely and evenly to prevent movement, uneven settlement or concentrated loading that could result in unacceptable stresses being generated in the tank shell.

Pre-installation inspection Before and during the positioning of a tank in the excavation it should be examined for any damage or defect to the surface or coating. Any damage should be made good so as to restore the surface or coating to its original manufacturer’s specification. Any damage to GRP tanks should be referred to the manufacturer for repair or replacement as necessary. Backfill

Backfill material should fulfill the following requirements: • be chemically inert; • be non-damaging to the environment; • be free flowing to aid placing and full compaction; • give adequate support and restraint to the tank shell; • not damage the protective or outer coating; • allow easy removal of the tank at the end of its operational life; • provide an anti floatation burden over the tank.

Commonly, non-cohesive granular materials are used as backfill and some suitable sands and gravels are specified in BS EN 976 and BS EN 12285. In addition, some foams and some types of concrete may be equally suitable, provided they fulfill the requirements set out above.

The tank backfill material should be placed carefully and evenly around the tank ensuring full compaction until raised to a level not exceeding the tank access chamber attachment flange.

Any temporary shoring used during installation should be removed in such a manner to ensure that the backfill remains adequately compacted. Additional backfill may be required to fill any voids behind the shoring. Alternatively, appropriate permanent shoring may be left in place.

Tank access chambers Tank access chambers and associated manhole covers should be designed to prevent the ingress of water or release of spilt product into the environment. The covers should be easily removable for periodic inspection of the chambers.

Tank access chambers should be designed and installed so as to avoid the transmission of loads directly through the chamber walls to the underground tank shell. Manhole frames and covers should comply with the requirements of BS EN 124 C250 and Product Assessment Specification PAS26:1998. Surface manhole covers and frames should be installed so as not to transmit any imposed load onto the chamber.

The chamber and manhole cover should be of sufficient size to enable the tank man-lid, including some disconnected pipe-work fittings, to be removed through the manhole.

ABOVE GROUND TANKS Above ground tanks, normally only used in service stations for high flash point petroleum products, have the advantage of being easily inspected for corrosion or other degradation. Generally, they are provided with a bund to contain any leakage of product. Further guidance on the storage of flammable liquids in above ground tanks is contained in HS(G) 176. Tanks for diesel fuel, gas oil and kerosene Tanks for high flash-point petroleum products such as diesel fuel, gas oils and kerosene should be constructed to comply with the requirements of BS 799 Part 5, and the guidelines PPG2 Above ground oil storage tanks, issued by the Environment Agency, should be followed.

All tanks should be located where they can be inspected externally for corrosion or leaks and suitably protected against corrosion for the duration of their operating life.



Every part of the tank should be contained within a bund, including all valves, filters, filling point and the vent pipe. Alternatively, double skin tanks may be appropriate, provided adequate precautions are taken to prevent overfilling, contain any spillage, protect against impact damage and all entries into the tank are above the maximum liquid level within the tank, all in accordance with BS EN 12285-2

Above ground installations should be protected from vehicular collision through the use of bollards, posts, kerbs, railings or similar barriers.

Corrosion protection Metallic components of above ground tanks in contact with the soil or exposed to the weather will corrode unless protected. Therefore adequate corrosion protection, usually in the form of coatings and/or cathodic protection, should always be provided. Any coatings should be inspected for thickness, continuity and hardness prior to installation.

Fibreglass coating material may be used internally or externally on base plates, tank bottoms and shells as a corrosion barrier and again may be used in conjunction with a cathodic protection system.

Earthing Tanks should be earthed to protect them from lightning damage. Zinc or magnesium earthing rods should be used to protect tanks equipped with galvanic anodes, since copper earthing rods may interfere with cathodic protection. In general, such earthing systems should be totally segregated from the electrical earthing system for the site. Tanks for petrol Historically, petrol at service stations and other motor vehicle fuelling sites has, for safety reasons, been stored in underground tanks. However, in the light of environmental concerns and emerging technology some moves towards the development of above ground storage installations are taking place. There is no common standard in Europe for above ground petroleum storage tanks at filling stations but it is quite feasible to design a suitable installation, which can provide the necessary safeguards. American standards such as UL 2085 and Petroleum Equipment Institute (PEI) PEL/RP 200-96, offer guidance on the standard of fire protection for above ground tanks.

In each case an assessment should be carried out to identify the hazards and quantify the risks arising from or associated with:

— fire; — spill containment (if necessary); — leaks; — pumped deliveries; — security; — attempted theft; — impact damage; — malicious damage.

Adequate control measures to address all of these should be incorporated into the design of the tank and its installation. At present most petrol tankers are not normally fitted with cargo pumps and it may be necessary to provide a separate fixed pump as part of the storage installation for delivery purposes. In all such cases the delivery pipe-work should be designed as a pressure system and include all appropriate control measures to prevent the tank being over-pressurised or overfilled.



Location of tanks All tanks should be located where they can be inspected externally for corrosion or leaks and suitably protected against corrosion for the duration of their operating life. They may be sited within a special enclosure or a vault, or may be in the open if constructed to an insulated and fire protected design. In the absence of other security measures, consideration should be given to locating all tanks within a secure compound or in accordance with the separation distances set out in HS(G)176.

In this context, a vault is essentially a liquid-tight structure that completely surrounds a tank, while a special enclosure is liquid-tight, not backfilled and normally constructed of at least 150 mm of reinforced concrete. Special enclosures are usually only applicable where buildings or property limitations make installation of bunded above ground tanks impractical.

Installation of above ground tanks The sub-soil conditions should be examined in order to determine any special precautionary measures, which might be necessary to reduce the possibility of structural failure.

Foundations Foundations for above ground tanks should support the tank securely and evenly to prevent movement, uneven settlement or concentrated loading that could result in unacceptable stresses being generated in the tank shell. Foundations for small vertical tanks are typically constructed of reinforced concrete and should be well drained to prevent the accumulation of water, which could accelerate corrosion. Horizontal tanks are often provided with prefabricated saddles by the manufacturer. For tanks where saddles are not provided they may be constructed of steel or reinforced concrete. In this case care should be taken to isolate the tank shell from the saddle by use of insulating material to reduce the risk of corrosion.

Bunds Bund areas around above ground tanks and associated pipe-work are designed to contain product spills and releases from tanks, pipe-work and associated equipment. Bund areas should contain accidental spills and prevent them from entering the ground. Unconfined spills present a fire hazard and a contamination threat to the environment; they are dangerous and difficult to control.

Guidance on the design and construction of bunds is given in HS(G)176 and by the Environment Agency in its note PPG2. These documents should be referred to at the design stage and their recommendations followed for any proposed installation of above ground tanks.

Bund walls may be constructed of steel, reinforced concrete, reinforced masonry or other suitable material and should be designed and constructed to be liquid-tight as well as capable of withstanding the hydrostatic pressure of the contained liquid when full. A steel bund may be an integral part of the tank. Only materials which ensure compliance with environmental standards should be used and any coatings or liners should be installed in accordance with the manufacturer’s instructions.

Except in those cases where penetrations are absolutely unavoidable, pipe-work, cables and conduit should pass over the top of the bund wall. Where penetration of the bund wall or floor is unavoidable, the penetration should be sleeved and sealed liquid-tight using materials which are resistant to petroleum products.

Safe access to the tanks, valves and pipe-work within the bund area should be provided. Safety regulations may require fixed stairs and handrails at the access points.

Drainage

The area within the bund is generally sloped away from the tank to a collection sump to facilitate the removal of accumulated rainwater or spilt product. This can be achieved by use of a manually operated pump discharging to an oil separator. The bund wall should not have any holes through it. This is to protect the environment by preventing the inadvertent uncontrolled release of contaminated water or product.

CONTENTS MEASURING SYSTEMS All tanks or compartments should be provided with a means for ascertaining the quantity of product stored. This may be by use of the dipstick supplied with the tank or by some means of tank contents gauge.

Dipstick



Dipsticks are a simple means of measuring the height of product in the tank from which the volume of product is then determined. Dipsticks are used for the pre-delivery check in order to determine the ullage and, by the use of water finding paste, to check for the presence of water. Such devices may introduce volumetric inaccuracies as they are not calibrated for their respective tank after installation and the coarseness of the graduations leads to a lack of discrimination in the readings. Accordingly they are not generally suitable for use as part of an accurate system of wetstock reconciliation specifically for the purpose of leak detection at sites where an undetected leak would pose a high safety or environmental risk.

Dipsticks should be marked with the number of the tank or compartment for which they were supplied and its safe working capacity. It is recommended that tank gauging, rather than dipsticks, is used in the following circumstances: (a) By the driver during driver only deliveries. Reason: To enable the driver to see the tank contents levels during the delivery. Alternative: Site operator may use dipstick prior to delivery and provide driver with

written confirmation of ullage space

(b) Where a vapour balancing system is in operation (and the arrangement is such that pressure within the system may displace the level of liquid in the dip tube).

Reason: Inaccurate readings of tank contents; also vapour may be forced out of the dip tube creating a potential explosion hazard.

Alternative: Dips may be taken before delivery is commenced and after it has finished when any pressurisation has abated.

(c) Where offset fill systems are installed. Reason: Product may be released through an uncapped dip opening during a

delivery.

(d) Where the dipstick would interfere with the operation of an overfill prevention device. Tank gauging systems

Tank gauges provide an indication of the quantity of liquid contained in a storage tank without the need to access the tank and take manual dip readings. Like dipsticks, the gauge measures height of product in the tank, but by indirect means, from which the volume of product is then determined. The effects of variations in the properties of the product and other factors which will have an effect on the measurement of height and computation of volume can be taken into account depending on the sophistication of the system used.

Tank gauge systems may interface with other equipment and also be capable of providing automated stock control, overfill prevention and leak detection information. In these systems, the ability to measure average product temperature and to allow for such variations in the computations is desirable for accuracy of stock control. Any electrical or electronic equipment included in such systems and used in hazardous atmospheres must be constructed and certified as appropriate for use in such situations.

Tank gauge systems should be checked for compatibility of use when a vapour balancing system is fitted and should never be installed within a fill or vent pipe. Calibration In order to achieve accurate gauge readings across the operating range of the tank it is important to calibrate the system in accordance with the manufacturer’s recommendations.

TESTING TANKS Tanks should be checked to confirm their integrity before being brought into service and subsequently if a leak is suspected. Various methods may be used to fulfil these requirements.

Initial testing of new tanks Before any tank is brought into service it should be properly tested by competent persons, to verify its integrity. All tests should be fully documented including a clear indication of the scope, type and results of the tests. Copies of all such test certificates should be given to the site operator.



When tanks are filled for the first time following new construction or modification it is important to ensure that all tanks that have been emptied have enough product put in them to seal the drop pipes. This is an important safety requirement.

Leak testing of existing operational tanks

During the lifetime of a tank a test of the tank shell may be necessary if a leak is suspected. The methods used will be determined by the type of tank and its installation and an assessment of the risks associated with each method. Details are given in Annex 7.1 of the Code.

REFERENCES — BS 799: Part 5, Specification for oil storage tanks. — BS EN 976-1; BS EN 976-2; BS EN 977; — BS EN: 978. Single skin glass reinforced plastic tanks. — American Standards UL 2085, and Petroleum Equipment Institute (PEI) PEIIRP 200-96. Fire protection standards

guidance — BS EN 124: Gully tops and manhole tops for vehicular and pedestrian areas. Design requirements, type testing,

marking 1994. — ISO 9000. — prEN 12285: Single skin steel tanks. — prEN 12285: Double skin steel tanks. — prEN 976-3; prEN 976-4: Double skin glass reinforced plastic tanks. — prEN 13160: Draft standard of leak detection. — BS PAS 26: Manhole tops intended for use on service station forecourts and pavement areas. Requirements,

performance and marking, 1998. — Environment Agency PPG2: Above ground oil storage tanks — Construction Products Directive. — HSE leaflet: Safety in excavations. — HSE: HS(G) 176: Storage of flammable liquids in tanks, 1998.



TANK TESTS

Any physical testing of tanks which contain or have contained petrol has the potential to create a hazard. In consequence, it is essential that the following precautions are observed before any such work is authorised: — all test systems to be used are supported by fully documented procedures; — all equipment is appropriately certified for use in hazardous atmospheres; — all operatives are adequately trained and certified as such.

It is essential that any potentially hazardous operations (e.g. overfilling or pressurising tanks) should be the subject of a detailed Method Statement which should be agreed before any work starts. Ideally, the process should have an appropriate quality assurance certification such as ISO 9000. Tanks may be tested as described in the following paragraphs.

Initial testing prior to commissioning All new tanks are tested by the manufacturer prior to delivery and should be accompanied by a test certificate. Testing of tanks prior to commissioning, therefore, should only be necessary if there is evidence of damage to the tank either in transit or during installation.

For double skin tanks all monitoring devices should be checked for correct operation in accordance with the manufacturer’s instructions before product is delivered.

For single skin tanks a pressure test in accordance with the manufacturer’s instructions should be performed. Alternatively, a hydrostatic test may be used by applying air pressure of 0.7 barg to a tank full of water and maintaining it for 60 minutes during which time no loss in pressure should be recorded by the gauge. In addition, for single skin GRP tanks a deflection test in accordance with ES EN 976-2 should have been undertaken during installation to ensure correct back filling and the result of this test should be available.

For above ground tanks a hydrostatic test should be performed, checking for evidence of leaks whilst under pressure. Alternatively, suitable precision test methods may be employed in accordance with the manufacturer’s instructions and subject to meeting the tank’s design limitations.

Note: For all pressure tests a pressure relief valve set to operate at 10% above test pressure should be incorporated in the test rig. The pressure reading should be taken from a suitable gauge sited on the tank top. A 150 mm dial size is recommended. Alternatively: suitable precision test methods may be employed, subject to meeting the manufacturer’s specifications.

Leak testing for operational sites Where a leak is suspected the tank should be tested using a method appropriate to the installation. Test methods based on precision testing techniques should be used wherever possible. Such forms of testing take account of the many uncontrolled variables which, a simple hydrostatic test cannot. They are therefore more reliable and have a greater probability of identifying a leak or false alarm than the latter.

Generally precision test methods will be certified as complying with the United States EPA Standard test procedure for evaluating leak detection methods and operators of such systems should demonstrate that the operating criteria specified by any such certification, including any limitations, is strictly adhered to.

If for any reason a test is conducted under conditions outside the limitations of the evaluation certificate, the test report will need to state the limitation(s) that have been exceeded together with details of any supporting calculations or increase in the data collection period etc. to confirm that the test complies with the US EPA protocol. Precision tests generally fall into one of two broad categories: (a) Volumetric methods use techniques which detect any change in the height of liquid in the tank to define a leaking

or tight tank. Typically such tests provide a measurement of the leak rate. (b) Non Volumetric tests do not rely on detecting a change in height measurement to determine a leaking or tight tank,

and typically provide a pass or fail result. Examples of this type of test are those applying a vacuum to the tank or those using chemical trace elements.

It is essential that any electrical equipment employed is certified to an explosion protection standard suitable for the zone in which it is used. It is recommended that independent assessment of the performance is provided.

Method statements and operating protocols should always be available with precision test methods. These are necessary to ensure that the appropriate test considerations and qualifications pertinent to such tests are fully addressed at the time of testing. The method statements should clearly identify particular factors that have to be considered and which may affect the accuracy of the test including: — water table measurement and compensation; — positions of sensory probes within or outside the tank in order to detect leakage;



— procedures for testing multi-compartment tanks; — minimum certified product levels for testing; — compensation for climatic conditions at the time of test; — stabilisation periods for equipment or product to eliminate temperature effects; — process to compensate for fuel vaporisation in the ullage space; — means of detecting both leaks of product out of, and entry of water into, the tank.

Typical detail of an above ground bunded tank with suction lines to the dispenser.



Typical detail of a double skin underground steel tank with suction lines



Typical detail of single skin under ground G.R.P tank with pressurised suction line.

(All other lines/pipes - vent, fillpipe, gauges omitted for clarity)

Petroleum Sector – Rwanda Rev 2 Final Report


PIPE WORK SYSTEMS

GENERAL A properly designed and installed pipe-work system minimises hydraulic losses, maximises dispensing efficiency, provides operational flexibility, facilitates line testing and protects people, property and the environment against any unexpected and uncontrolled releases of product.

Pipe-work for petroleum products is required to provide a safe, sound, secure system for the transport of a potentially dangerous and highly polluting liquid and to retain its integrity for the lifetime of the installation without danger to health, safety or the environment. It should, so far as is reasonably practical, be protected against environmental degradation and mechanical damage.

So long as the pipe material does not deteriorate and retains its integrity, underground installation provides a safe means of protecting pipe-work and is the preferred system at filling stations. However, unless particular precautions are taken to protect against the effects of any leak from pipe-work, there is potential for significant fire and explosion risks and of considerable environmental pollution. Furthermore, it is not possible to inspect the pipe-work visually for deterioration. For these reasons, special precautions are necessary for the protection and security of underground pipe-work.

Guidance on choice and restrictions which apply to the evaluation of systems using different materials are given in the IP’s Performance specification for underground pipe-work systems at petrol filling stations. Planning Underground pipe-work has, in the past, been the single element of petroleum installations most frequently responsible for leaks of product. This has led to pollution of the environment, contamination of aquifers and fire and explosion hazards, sometimes at locations remote from the installation. This has in large measure been a direct consequence of the vulnerability of buried steel pipe-work to corrosion which, coupled with inadequate attention to corrosion protection during installation, particularly of the vulnerable cut threads of screwed joints, has lead to serious point corrosion and early failure of pipe-work.

The development of non metallic pipe-work and latterly the better protection available for steel pipe-work together with the technique of secondary containment has been a direct result of increased awareness of environmental damage and the costly consequences of continued unabated pollution.

Successful pipe-work installation relies upon those involved having the appropriate skills and a sound working knowledge of good practice in the procedures for laying and jointing the particular type of pipe-work being installed as well as an appropriate design for the system bearing in mind the risks to be addressed.

Essential requirements Pipe-work systems should be designed, constructed and installed to protect the public and environment against the effects of any release of product. When properly installed the complete system should have sufficient mechanical strength, stability and resistance to degradation to retain its integrity for the entire duration of its design life. The essential performance requirements for underground pipe-work installations include the following:

(a) Pipe-work susceptible to corrosion or any other degradation should feature: — the means to contain any uncontrolled release of product; — the means to detect any perforation of the pipe wall; — adequate protection against damage during installation and operation.

(b) Pipe-work not susceptible to corrosion or any other degradation should feature: — the means to detect any uncontrolled release of product; — adequate protection against damage during installation and operation

Some of the factors to be taken into account are: — protection during transport to site; — offloading on site; — means of installation and backfill; — operational loading; — superimposed loads; — stresses induced by movement; — degradation due to corrosion, chemical action or fuel incompatibility; — ability effectively to monitor for and warn of leaks in the pipe-work.



The appropriate connections for filling, venting, dispensing, discharge and vapour return lines, contents measurement, testing, leak detection and overflow prevention devices to the tank man-lid should form an integral part of the overall design of the pipe-work system.

Approvals and compliance At the time of drafting this document no EU standards exist for underground pipe-work for use at petroleum installations. It is recommended that all pipe-work systems should meet the requirements of IP Performance specification for underground pipe-work systems at petrol filling stations.

TYPES OF PIPE WORK Steel, glass reinforced plastic (GRP), polyethylene and composites including combinations of other plastic or metals are commonly used materials for pipe-work. Other developments are taking place and the inclusion of sections particular to these materials is not intended to exclude the use of alternatives, which may be equally suitable.

All pipes and fittings should be constructed of materials fit for the purpose and, if vulnerable to external corrosion or environmental degradation, should be suitably protected. Additional protection will be necessary in certain conditions. In particular where:

— the pipe or fittings may be subject to corrosion; — there is uncertainty about whether system integrity can be retained for the full operational life; — there is a particular risk to safety e.g. the proximity of a cellar, underground railway, etc.; — the potential for damage to the environment is assessed as sufficiently high; — there is danger of contaminating potable water supplies in groundwater protection zones.

In such cases, some form of secondary containment may be an appropriate control measure. This is normally provided by a specially designed system, generally but not necessarily, using a larger pipe within which the primary pipe is contained together with special fittings for tee and elbow connections. As an alternative, specially constructed ducts may be provided in which the pipe-work is run. The ducts may be permanently covered over or have removable covers which will allow inspection and facilitate subsequent repair or modification of pipe-work. A continuously operating leak detection system should be provided within such a duct system to warn of any leakage and the dangers of the build up of hazardous atmospheres should be recognised.

Where corrosion is not a problem and the risk assessment indicates that there is no risk from migration of leakage contamination, pipe-work systems consisting of just the primary pipe, either as a continuous run or as jointed pipe, may be adequate. Steel When used underground all pipe-work, joints and fittings should be provided with a durable protective coating, cathodic protection or secondarily contained.

Experience has shown that surrounding galvanised pipe with sulphate resisting concrete does not afford adequate protection and this form of installation is not recommended and should not be used. An analysis of the risks will almost certainly identify a need for at least some form of leak monitoring system to be used in conjunction with any steel pipe-work installed underground. In many cases, secondary containment may also be necessary.

Because of the risk of leaks, joints in pipe-work should be kept to a minimum. Where they are necessary, welded joints are to be preferred. Flanged joints should only be used where they can be visually inspected and are normally confined to above ground use or contained within leak proof chambers.

Where steel pipe requires the use of elbows or other fittings, any jointing compounds used in the incorporation of such fittings should be of a type suitable for use with petroleum products.

GRP

GRP pipe-work, specifically designed and tested for use with petroleum spirit, has been used for many years for the construction of suction, offset fill, vent and vapour lines installed underground. Where a transition to above ground steel pipe-work is to be made a special adapter fitting should be used and the vertical up-stand adequately supported to prevent movement and the consequent transmission of load to the GRP pipe-work. GRP pipes should be handled with care at all times and should not be dropped. Pipes should be stored on a level surface free from sharp protrusions and adequately supported to prevent load or impact damage. Pipes should not be stored vertically.

Polyethylene Polyethylene pipe-work specifically designed and tested for use with petroleum products has been used increasingly in recent years for suction, pressure, offset fill, vent and vapour lines installed underground. The pipe obtains its structural strength from the material and construction and does not rely on backfill materials other than to support it in position. Where



a transition to above ground steel pipe-work is to be made, a special adapter fitting should be used and the vertical up-stand adequately supported.

Polyethylene pipe is subject to some thermal movement and in some cases to a small amount of elongation after prolonged contact with petroleum product. The material is extremely tough but abrasion over sharp or rough surfaces should be avoided.

Polyethylene pipe is available in continuous rolls or straight lengths. Straight lengths are jointed by thermo-fusion using specially designed welding sockets.

Continuous flexible composite Pipes manufactured from specially developed thermoplastic composites or other combinations of materials are available for use as underground pipe-work at petrol installations. They have the advantage of providing a continuous pipeline with no joints between connections to tank and dispenser.

They may be supplied either as a single pipe or with a continuous plastic secondary pipe. The former may be used with a suction system whilst the latter were developed specifically for use with pressure systems and in this case the secondary containment forms an integral part of the design and generally includes tank and dispenser chambers.

The inherent flexibility of such systems precludes the need for special precautions against the damaging effects of ground movement and pump surges. Where a transition to above ground steel pipe-work is to be made a special adapter fitting should be used and the vertical up-stand adequately supported. Other

These include flexible metal systems, in either single or multi-layer construction, with external corrosion protection and also composite pipes consisting of plastic and metallic layers to combine the advantages of both materials.

Any such systems may be appropriate for use in underground petroleum installations depending on the circumstances of each case. As a minimum requirement it is recommended that the supplier should be able to demonstrate that the pipe-work system can fulfil all the requirements as set out in the IP’s Performance specification for underground pipe-work systems at petrol filling stations. Ancillaries A number of ancillary features will form an integral part of the overall pipe-work system, some of which are referred to in the following paragraphs. They should all have similar performance characteristics to the pipe-work in terms of their ability to withstand operational loads and resist degradation for the lifetime of the installation.

Siphons A siphon is used where it is required to interconnect two or more tanks so that they operate as a single unit. Such installations will result in different operational procedures when filling and discharging these tanks. When installed with suction systems it may be necessary to provide a separate priming arrangement on the siphon.

When siphoning systems are used in conjunction with a pressure system they should comply with the pump manufacturer’s specification, which will include the provision of an automatic priming arrangement.

Siphon lines within tanks should extend to the same level as the bottom of the fill pipe. Valves should be installed in siphon lines to allow for the isolation of any interconnected tanks.

Fill points and lines connections Connection points for the tanker delivery hose may be constructed above ground or in a chamber below ground. They may be fitted directly onto the internal fill pipe projecting from the tank or onto an offset fill at a location remote from the tank. The internal fill pipe should be installed vertically within the tank, be continuous and be vapour tight. It should finish near the bottom of the tank but no closer than a quarter the diameter of the pipe. All other internal pipe-work should terminate above the level of the bottom of the fill so as to maintain a liquid seal under operating conditions.

The filling pipes at the delivery point should have suitable fittings to enable secure leak proof connection to be made to the delivery hoses. Such fittings should also have provision for a locking device that will prevent unauthorised access.

Where filling pipes are installed in underground chambers the termination height below ground level should be such as to enable reasonable, safe access during delivery. Safety platforms may be appropriate in the case of deep chambers.

Where filling pipes are installed above ground, the height of the fill pipe should be below the minimum height of the delivery tanker faucet to ensure proper draining of the hoses.

Fill lines should be fabricated from materials with adequate strength and durability to withstand the operating pressures structural stress and exposures to which they could be subjected. Newer developments include devices fitted to the fill pipe within the tank, which help to reduce the generation of vapour during tank filling.



A means for removing accumulations of water from the tank should be provided. In underground tanks this is normally via the fill pipe either directly or, in the case of offset fills, via a plug in a T fitting at the top of the vertical leg of the fill in the tank access chamber. The plug should only be removable by the use of tools.

Fill point for heating or burning oil storage should have significantly different connections from those used for petrol to prevent an accidental crossover of product. A smaller diameter and a square thread form are normal provisions for burning oil fill pipe fittings.

Spill prevention Provisions should be made to contain any accidental spills which occur during filling operations. Where back-flow is possible as with an above ground tank, a gate valve and a non-return valve should be fitted at the delivery hose connection point.

Overfill prevention An overfill prevention system is recommended to prevent the inadvertent overfilling of the tank. There are a number of alternative methods of achieving this: — including mechanical devices in or above the tank; — sensors located in the tank and in-tank sensing devices connected to a shut off device on the road tanker.

Overfill prevention devices should comply with the requirements of prEN 13616. Equipment manufacturer’s installation instructions should be closely followed for the system selected. Where installed within the internal fill pipe, it is important to ensure that this pipe retains its vapour tight integrity to prevent direct access to the vapour space within the tank via the fill point. For above ground tank installations overfill prevention devices should be capable of operating with pumped deliveries.

Venting A venting system is necessary to prevent tank distortion due to variations in internal pressure resulting from normal operational filling and emptying exceeding the design limits of the tank. Such systems should be designed to prevent the internal pressure within a tank from exceeding 35 mbar at maximum tank filling rates. Equally, during normal dispensing, the venting system should preclude the possibility of pressure within the tank falling below 2mbar vacuum. Normally, vents will be at least 50mm nominal pipe size. Vent pipes should be fitted as near as possible to the highest point of any installed tank or compartment. The open ends should be constructed so as to discharge upwards in the open air and be fitted with a suitable flame arrester that will not jeopardise the tank’s ability to breathe. All new installations for petrol storage tanks, subject only to those exempted by PG 1/14(96) published by the DETR/Environment Agency, are required to meet Stage l b vapour emission standards.

Valves Valves are an integral part of any pipe-work system. They are provided to ensure safe and correct operation of the system and should be designed and fabricated from suitable materials, having adequate strength and durability to withstand the operating pressures, structural stress and exposures to which they may be subjected. Non-return valves, often referred to as check valves, are used to prevent the back flow of product. In suction systems a check valve is installed in the suction pipe-work generally located within the dispenser housing or directly below it. This is to retain prime in the system. By having the valve in this location, in the event of any leak in the pipe, it will cause product to drain back into the tank rather than escape to the surrounding ground environment. In above ground storage tank installations, where fill connections are below the level of liquid in the tank, a conventional valve and a non-return valve should be fitted at the fill points.

Isolating valves should be installed to allow tanks and pipe-work to be isolated, tested and secured. Each fill line and pressure line from an above ground tank should be provided with a valve located as close as practicable to the shell of the tank. It is recommended that isolating valves be installed immediately upstream of impact valves, dry-break fittings, pressure regulating valves, pumps and other equipment which could release product when serviced.

Pressure regulating valves should be installed in an above ground tank installation directly prior to the pump inlet to allow flow only when the pump is operating and, when fitted with an automatic shut off facility, to prevent any siphoning occurring. The valve should be installed in conjunction with an impact valve.

Impact valves should be installed immediately upstream of any equipment, fed by a pressure line, which may be vulnerable to impact. Such valves incorporate a weakened section that will shear in the event of any significant impact, causing it to close and a fusible link which closes the valve in the event of fire.

Pressure vacuum valves are located at the vent pipe outlet where Stage l b vapour recovery is installed. They reduce vapour release to atmosphere during delivery whilst ensuring that air can be drawn into the tanks to replace product dispensed during normal site operations.



INSTALLATION Generally, suction or pressure pipe-work, with the exception of part of the filling and vent pipes, is installed underground. This is because it simplifies forecourt design, provides uninterrupted space at ground level and obviates the need for special protection measures against fire, impact and UV or other degradation. The disadvantage is that underground can be a hostile environment particularly for ferrous materials and any degradation of or leak in the pipe-work is not visible. This may require other means to detect and protect against the detrimental effects of such failures. Above ground pipe-work has the advantage of being able to be visually inspected for deterioration or leakage but it is vulnerable to damage.

Above ground All above ground pipe-work and associated fittings should be provided with protection against the dangers of fire, impact or environmental degradation. Currently it is normal practice to use steel pipe and metallic fittings above ground. Low melting point materials such as GRP, polyethylene and other plastics should only be used if adequately protected. All such pipe-work should be firmly supported by hangers, supports or brackets. Adjacent to traffic areas it should be protected from collision damage.

Underground All underground pipe-work should be surrounded with selected backfill material, normally to a minimum thickness of 150 mm. A suitable backfill is a non-cohesive granular material. The surface of the forecourt or driveway above any pipelines should be designed and reinforced to spread the weight of any vehicular traffic passing over so as to relieve the pipe-work of any direct loading.

Pipe-work should be installed in accordance with the manufacturer’s recommendations and care should always be taken with storage and handling on site to avoid damage to or contamination of pipe-work and fittings, particularly where joints are to be made.

The ground should be prepared before the pipe-work installation is commenced. Areas of low strength, which may be susceptible to differential settlement should be in-filled and compacted with a suitable granular material. Where ground conditions are such that migration of backfill is likely to occur, the excavation should be lined with a geotextile membrane. The liner should extend to the highest level of the backfill material with any overlaps being at least 300 mm. In poor ground conditions and when using flexible pipe-work systems it may be appropriate to install a continuous sub-base. Pipe-work should not be built into concrete manhole or other walls. Where existing manholes are to be used the wall should be sleeved to provide a clearance passage for the pipe and finished with a liquid-tight sealing arrangement resistant to petroleum products.

All pipe-work should be laid with a continuous fall back to the storage tank to ensure that the pipe contents drain into the tank in the event of pipe failure or when breaking the pipe-work to undertake maintenance work. It is essential that high or low points in pipelines is avoided as they will form vapour or liquid traps which will impair the effective operation of the system.

On sites where petroleum products are or have been stored, there is always the danger of flammable atmospheres being present particularly in excavations, pits or chambers below ground. Particular precautions should be taken when installing pipe-work on such sites and any electrical apparatus used should either be certified for use in flammable atmospheres or, if not so certified, should be located away from any such potential hazards.

Steel Steel pipe-work being installed underground is normally laid on temporary supports which should then be removed after the backfill material has been compacted around the pipe to provide adequate support. The backfill should be non-damaging to the protective coating of the pipe-work and capable of sustaining its support and protection for the life of the installation. It is essential that steel pipe for use underground has adequate protection against corrosion, particularly of the joints, or is secondarily contained and provided with a system which continuously monitors the interstitial space for the integrity of both skins.

Steel pipe-work should always be connected to tanks or dispensers using flexible connections to allow for relative movement and ensure no resulting load is transmitted to the rigid pipe-work.

Joints in steel pipe-work may be mechanical or welded. In either case special precautions will be necessary to ensure that the integrity of the corrosion protection is fully maintained and can be sustained for the lifetime of the installation.

Where used above ground, steel pipe-work should be adequately protected, rigidly supported and be so positioned that comprehensive visual inspection is possible without the need for dismantling.

GRP



GRP pipe-work should be surrounded by 150 mm of selected backfill material, which provides continuous support for the pipe. This material should be free from sharp objects that could damage the pipes. If pipe-work is to be temporarily supported during laying then wooden blocks or sand-bags can be used. The supports should be spaced to prevent pipe-work from sagging and it should be noted that GRP pipe is only flexible up to a certain point after which it will fracture. As a result, loads on the pipe-work between supports should be avoided. Concrete blocks and bricks should not be used for support as they can damage the pipe and all temporary support should be removed when adequate backfill support has been provided.

Joints in GRP pipelines are made using a thermo setting epoxy resin. Electrical heating pads are often used to aid curing and may be essential during cold weather. Care should be taken to ensure that no electrical equipment is used in flammable atmospheres unless it is designed and certified for use in such locations.

GRP pipe-work should always be connected to tanks or dispensers using flexible connections to allow for relative movement and ensure no resulting load is transmitted to the pipe-work.

Polyethylene Polyethylene pipe-work should be surrounded by 150 mm of selected backfill material, which provides continuous support for the pipe. In certain cases, to ensure that the correct falls are maintained, continuous pipe-work may be laid directly onto a lean mix concrete base. In such cases no backfill material is necessary beneath the pipe-work but the base should have a smooth finish to prevent damage to the pipe. Pipe-work should be provided with a minimum of 150mm surround of backfill material and should terminate at ground level.

Joints in polyethylene pipe-work are made by thermo fusion of the material using special welding sockets and appropriate welding equipment. Care should be taken to ensure that no electrical equipment is used in flammable atmospheres unless it is designed and certified for use in such locations. Flammable atmospheres may exist in excavations on existing sites in addition to the normally designated areas. Compression fittings supplied for the transition connections at the end of the pipe-work should be of an appropriate design and installed in accordance with the manufacturer’s instructions.

Where polyethylene pipe is connected to the dispenser in a pressure system, the transition joints to steel should be situated either above the containment membrane or drip tray at the base of the dispenser. If there is no such membrane, below the dispenser in a leak proof sump which is provided with leak monitoring.

Pipe-work runs should be designed and laid to allow for small thermal movement or elongation of the pipe. This is normally accommodated by the natural curvature of the pipe-work. Where straight pipe is used small movements can be accommodated by changes of direction at elbows or knees. Excessively long runs of straight pipe-work with no changes of direction are best avoided.

Polyethylene pipe-work should not be used above ground unless suitably protected against fire, mechanical or impact damage and the effects of ultra violet radiation. Above ground, all pipe-work is normally constructed using galvanised steel or flexible metallic connectors

Continuous flexible composite The pipe-work is either single or secondarily contained and normally supplied in a continuous roll which is laid out between the tank and the dispenser.

In some cases leak proof containment sumps are installed under the dispenser in which, the termination connections to the dispenser are made. In this case the sump should be provided with effective leak monitoring. Lines should be laid on a bed of granular backfill material with a continuous fall back to the tank and subsequently surrounded with 150 mm of the selected backfill material.

Identification markings All installed pipe-work should be clearly identified and tagged where it is visible in chambers to show its function. At the filling point each fill pipe should be labeled with the number, grade and working capacity of the tank to which it is connected. Vent risers should be labeled with the corresponding tank number at a conveniently visible location near to ground level.

Electrostatic hazard The flow of petroleum product through pipe-work can generate an electrostatic charge which, if not allowed to dissipate to earth, may build up on the surface of the pipe wall and have the potential to create a spark when an earthed conductor is brought into close proximity to it. With bare steel pipe-work the charge is readily dissipated to earth but with non-metallic pipes, a charge could build up and if unearthed metallic fittings are isolated by insulating material, the danger of electrostatic discharge may occur. For this reason it is important to ensure that non-metallic pipe-work is either treated to be electrically conducting or that it does not incorporate isolated and electrically insulated metallic parts.



TESTING PIPE-WORK Pipe-work should be checked to confirm its integrity before being brought into service and subsequently if a leak is suspected. Various methods may be used to fulfil these requirements. Initial testing of new pipe-work Before any new pipe-work is buried it should be tested by a competent person to verify its integrity as indicated in "Pipe-Work Tests". All tests should be fully documented including a clear indication of the scope, type and results of the tests. Copies of all such test certificates should be given to the site operator.

Leak testing of existing operational pipe-work During the life of the installation a test of the pipe-work may be required if a leak is suspected. The methods used will be determined by the type of pipe-work, its installation and an assessment of the risks involved in using each method. Details of suitable methods are given in "Pipe-Work Tests".

REFERENCES — BS 7117: Metering pumps and dispensers to be installed at filling stations and need to dispense liquid fuel. — DETR/Environment Agency, PG 1/14(96). Secretary of State’s Guidance Unloading of petrol into storage at service

stations. — Institute of Petroleum: Performance specification for under ground pipe-work systems at petrol filling stations. — prEN 13616: Overfill prevention devices.



PIPE WORK TESTS Any physical testing of lines which contain or have contained petrol or petrol vapour has the potential to create a hazard. In consequence, it is essential that the following precautions are observed before any work is authorised on such elements: — all test systems to be used are supported by fully documented procedures; — all equipment is appropriately certified for use in hazardous atmospheres; — all operatives are adequately trained and certified as such. Pipe-work and fittings may be subject to testing as set out in the following paragraphs. Initial testing prior to commissioning Non-pressure lines (i.e. suction, off-set fill, vent and vapour pipe-work) should be subjected to air pressure, normally of 0.7 bar(g), which should be maintained for 30 minutes. No loss of pressure should be recorded by the gauge during this time. Whilst under pressure each joint and all elbows and fittings should be wiped with soapy water or other appropriate test medium and checked for signs of leaks as evidenced by the appearance of bubbles. Pressure lines should be subjected to a hydraulic pressure of twice the working pressure. After pressure stabilisation the test should be continued for 30 minutes during which time there should be no loss of pressure as shown by the gauge and no evidence of weeps from any visible joints or fittings. Secondary containment pipe-work should be tested by subjecting the interstitial space to an air pressure test of 0.35 bar(g) maintained for 30 minutes. No loss of pressure should be recorded by the gauge during this time. Whilst under pressure each joint and all elbows and fittings should be wiped with soapy water or other appropriate test medium and checked for signs of leaks as evidenced by the appearance of bubbles. Some alternative options for methods of test are: (a) Hydrostatic pressure of 1 bar(g) applied on lines full of water. (b) Gas low pressure testing using a helium/nitrogen mix in association with a helium sensing device. (c) Any other line testing system having a performance capability at least equal to any of the foregoing. Leak testing for operational sites If a leak is suspected the pipe-work should be tested using a suitable method appropriate to the installation. Typical test methods are as detailed above except that the use of the soapy water test is not possible on buried lines and an inert gas must always be used instead of air for pressurisation. Any water used should be disposed of either through the forecourt oil separator or as contaminated waste.



Details of a G. R. P tank with pressure line installed.

Details of a double skin steel tank with a suction line installed



DISPENSERS

GENERAL The design of dispensers for fuelling vehicle tanks will vary depending on the system used to transfer the product from the storage tank to the dispenser. This may be accomplished by suction or pressure or a combination of the two methods. With suction systems, the pump is incorporated within the dispenser housing, whereas with pressure systems, the pump is located elsewhere, either within the fuel tank or at a location above or adjacent to it and remote from the dispenser.

Throughout this section reference is made to British Standards but a prEN 13617-1 Construction and performance of dispensers, has just been published. Regard should also be given to the requirements of any relevant EU Directives in respect of any equipment installed on site. All new equipment should comply with any applicable EU directives that are mandatory on the date that the equipment is sold and, where appropriate, should bear the ‘CE Marking’.

DISPENSING SYSTEMS The various configurations of equipment that may be used to transfer product from storage tank to the dispenser are briefly described in the following paragraphs.

Suction systems A suction pump is incorporated within the dispenser housing which draws product through a suction line from the storage tank. A non-return valve is normally located at the base of the dispenser to retain prime.

Submersible pumps An integral motor and pumping unit, which is located in the fuel storage tank. The pump pressurises a fuel supply line to one or more dispensers which do not themselves contain pumps. Pressure drop detector, air separator and other control mechanisms are usually located on the tank top.

Remote pumps A pump, located above or adjacent to the fuel storage tank and remote from the dispenser, which draws fuel from the tank under suction and simultaneously pressurises a fuel supply line to the dispenser which does not itself contain a pump.

Gravity fed systems A system where the dispensers are fed from an above ground fuel storage tank. In such cases a pressure regulating valve is normally located upstream from the dispenser.

Dispersed dispensers These are systems in which a suction dispenser additionally supplies one or more remotely located hose and nozzle assemblies via a pressure line. Such systems may typically be used for commercial vehicle refueling where it is required to fill tanks on both sides of the vehicle with single computation for payment.

SELECTION OF DISPENSERS Standards of construction for dispensers have changed over the years and many units which are still operational were built to a lower standard than BS 7117: Part 1: 1991 which is the current standard. Selection of the appropriate standard will depend on whether the dispenser is to be installed on a new development or an existing operational service station. The following guidelines should be followed:

For new and rebuilt sites Dispensers should be certified as complying with BS 7117:Part 1:1991 and BSPASO22: l997, and should be installed in accordance with BS 7117: Part 2:1991 and the manufacturer’s instructions.

For existing sites On existing sites, previously used and suitably reworked dispensers or those manufactured to a standard earlier than BS 7117 Part 1:1991 may be installed provided an acceptable level of safety can be achieved. This will be the case if the following provisions are met:

— dispensers are certified to at least BASEEFA standard SFA3002, or to the standard of the dispensers that are being replaced, whichever is the more recent;

— dispensers and associated equipment continue to comply with their certified standard and are installed in accordance with the manufacturers installation instructions.

Where dispensers are being re-installed following major modifications to the site the following additional features should be incorporated within the installation:

(a) A leak proof plate or membrane installed or constructed so that any leakage of petrol within the dispenser housing is directed to the outside of the housing or is otherwise detected and prevented from entering the ground beneath the dispenser.



(b) Electrical connections tested to confirm compliance with the appropriate installation requirements i.e. BS 7671, BS EN 60079-14, SFA 3002 and the manufacturer’s instructions.

(c) For suction systems, a non-return valve installed within the dispenser housing. It is recommended that this incorporates a device to allow the system to be drained back to the storage tank without the need to break pipe-work connections.

(d) Any check valve at the tank end of the suction line should be removed. Labeling may be required to avoid confusion as to the position of check valves.

(e) Break couplings are installed either in the hoses, or at the dispensing nozzles.

INSTALLATION OF DISPENSERS In all cases, dispensers should be securely mounted on islands or plinths and protected against damage from vehicles. All pipe-work connections to the dispenser should be liquid tight. Electrical connections should be made in accordance with the manufacturer’s instructions and should maintain the integrity of the explosion protection.

In addition the following features and accessories should be included as an integral part of the installation of dispensers on both new and existing sites. Pipe-work connections For rigid suction systems, pipe connections are generally made via a flexible connector. A non-return valve (which may be separate from or integral with the dispenser) should be located above the island and within the dispenser. For pressure systems, the pipe-work should be designed to incorporate isolating valves, impact check valves and leak detection systems where it connects to the dispenser.

Leak proof membranes and sumps The requirements of BS 7117: Part 2 include a leak proof drip tray or membrane arrangement beneath the dispenser to ensure that product from internal leaks flows onto the forecourt surface where it will be noticed. With pressure systems, leak proof sumps may be used instead of, or in addition to, a drip tray. These provide convenient access below the dispenser to any isolating and impact check valves and for the connection of pipe-work.

Under pump sumps are likely to contain vapour. To reduce the likelihood of a potential explosion hazard as well as to avoid ground contamination, special precautions will be necessary. Consequently, under pump sumps should be: — impervious to the fuel; — adequately protected against corrosion; — sealed at all pipe entries to prevent fuel leakage into the ground and ingress of ground water; — fitted with an appropriate leak detector device certified for use in zone 1; — designed to allow easy removal of any fuel or water that may accumulate.

Non-return or check valves These are required on each line of a suction system to prevent the fuel within the dispensers draining back to the storage tank resulting in the loss of pump prime. In order to reduce ground contamination and a safety hazard in the event of a suction line leak, they should be fitted within the dispenser housing and not at the storage tank. Suction dispensers certified to BS 7117: Part 1: 1991 will be supplied with check valves which may be integral with or external to the pump assembly.

When replacing dispensers on existing systems, non-return valves fitted at the storage tank should be removed. If this interferes with the correct operation of existing dispensers (e.g. on shared suction lines), those dispensers should also be fitted with under-pump non-return valves. On installations where not all dispensers have under-pump non-return valves, a legible and durable warning label should be fitted to the appropriate pipes in the tank manhole indicating the location of the non-return valve, (e.g. “Non-return valve in Pump xx”).

Break couplings These are fitted external to the dispenser housing either within the length of the delivery hose, or between the hose and the delivery nozzle. They are designed so that, in the event of vehicles moving off with the nozzle still in the filler pipe, they will separate without damaging the dispenser or allowing excessive fuel spillage. Where used, they should be certified to BS 7117: Part 1:1991 and be fitted in accordance with the manufacturer’s instructions. Break couplings may also be certified in accordance with prEN 13617-2 Construction and performance of safe breaks for use on dispensers.

Hoses These should comply with BS EN 1360 and when fully extended should not normally exceed the length specified in BS 7117. This does not apply to hoses used for vapour recovery for which reference should be made to BS PAS 022:1997.

Nozzles



Only nozzles complying with the requirements of BS 7117: Part 1:1991 or BS PAS 022: 1997 should be fitted to dispensers. For diesel dispensers on attendant operated sites only, they may be fitted with latching devices, but such devices should not be fitted to dispensers intended for petrol or combined petrol and diesel at self service sites because of the risks associated with spillage.

Provision should be made to lock the dispenser nozzles securely to prevent them being removed from their housing when the site is not open for business or when the dispenser or part of the dispenser is taken out of service.

CONTROL SYSTEMS For self-service operation, whether attended or unattended, the dispensers will be operated via an electronic control system. For attended self service this will usually be the console used by the site operator to control the operation of the forecourt and may feature a keyboard or a touch screen. For unattended operation it will usually be a terminal which may be activated by notes, coins, token, cards, a key system or other form of payment.

In either case, certain features should be built into the control system to control the risks to health, safety or the environment. The controls will vary depending on the intended mode of operation, the type of equipment and the product being dispensed. Some of the more usual controls necessary for varying modes of operation are described in the following paragraphs.

Attended self-service sites Where the customers serve themselves but an attendant is present at the control console: (a) Petrol dispensers should be limited so that no more than 100 litres can be delivered in a single transaction. (b) The system should not be capable of allowing automatic authorisation of dispensers. (c) The system should not be capable of allowing preauthorisation of dispensers. (d) Means should be provided for the person supervising the dispensers to de-activate an individual dispenser. (e) An emergency stop switch or switches should be provided at the control point for use in the event of a potentially

hazardous situation arising. It should remove power immediately from all dispensers and other equipment associated with dispensers in the hazardous zone. The switch should be easily visible and accessible for each person supervising the dispensers and should be prominently labeled -‘PETROL PUMPS - EMERGENCY STOP’.

(f) A public address system should be provided to enable the person supervising the dispensers to instruct a customer without leaving the control equipment. It is recommended that the loudspeakers be located outside (e.g. above) the hazardous area, thus enabling the system to remain operational in an emergency.

Unattended self -service sites (available to the general public) Where the customers serve themselves but there is no attendant present: (a) Petrol dispensers should be limited so that no more than 50 litres can be delivered in a single transaction. (b) A timing function should be provided to prevent continuous operation of any dispenser for a period of more than

three minutes from the time it is authorised by the control equipment. This timing function should be in addition to any cash or volume limit.

(c) Operating instructions should be clearly indicated to the customer by notices fixed in a conspicuous position on each self-service dispenser and also on the payment or card reading terminal, if separate. Clear ‘Emergency Procedure’ notices should also be fixed at these points.

(d) An Emergency Cabinet should be installed on the forecourt for customers' use in an emergency. It should be conspicuous and readily accessible and the door of the cabinet should be easy to open by means of a ‘break glass’ bolt or similar device. It should contain the following equipment:

— Telephone for contacting the emergency services, with an adjacent notice displaying the site name, address and emergency telephone number and the action to be taken in case of emergency. — Emergency Switch which will be automatically operated by the action of opening or removing the door of the

cabinet. The switch should remove power to all dispensers and other equipment in the hazardous zone but not the general forecourt lighting. The operation of this switch should not allow reconnection of the supply other than manually by the site operator.

— A number of hand fire extinguishers, appropriate to the number of dispensers in the system. — A container of sand or similar absorbent material and shovel for applying it to clear up small spills or leaks of fuel.

MODIFICATION AND REPAIR If a dispenser becomes faulty it may be restored to serviceable condition provided that the repair is carried out so that the dispenser remains in accordance with its certification documentation. Similarly, where a dispenser is not necessarily faulty but is being refurbished or overhauled, it is essential that the work is carried out so that it still complies with its certification documents.

Reworked dispensers Replacement or additional approved parts which are not part of the original certified design may also be used to repair or refurbish a dispenser provided that the parts return the dispenser to serviceable condition and conform to the relevant standard to which the apparatus was originally designed. Dispensers repaired in this way are normally referred to as



reworked dispensers and one method of demonstrating their continued compliance with the design standard is to have an assessment report carried out by the authority which originally certified the dispenser. The repairs, refurbishment or reworking should be carried out by a competent person in accordance with standard IEC 79-19 or the BEAMA-AEMT Ex Code of Practice. Ways of demonstrating compliance with these standards include the repairer obtaining written approval for such work from the certificate holder or the authority originally certifying the dispenser or by being licensed under the Repair License Scheme operated by BASEEFA. A record of all work carried out to be handed to the site operator.

Testing dispensers following modification or repair After maintenance, repair or modification work has been carried out on a dispenser it should be tested to establish that the equipment is working satisfactorily paying due regard to the site conditions and the nature of the work carried out. Particular attention should be paid to: — flow rate; — noise and vibration; — leakage's in both the fuel and vapour recovery systems (where applicable); — correct operation of the display; — correct operation of all controls; — correct functioning of the nozzle and any automatic shut-off device.

Further guidance for maintaining dispensers constructed in accordance with BS 7117 is contained in BS 7117: Part 3: 1991.

REFERENCES — BS PAS 022: Certification of dispensers, 1997. — BS 7117: Part 1: Certification, 1991. — BS7117:Part2: installation, 1991. — BASEEFA Standard SFA 3002, 1971. — BS 7671: Requirements for electrical installations, TEE Wiring Regulations, sixteenth edition. — BS EN 60079-14: Electrical installations in hazardous areas (other than mines). — BS EN 1360: Rubber hoses and hose assemblies for measured fuel dispensing Specification. — prEN 13617-1: Construction and performance of dispensers. — prEN 13617-2: Construction and performance of safe breaks for use on dispensers — IEC 79-19: Electrical apparatus for explosive gas atmospheres. Part 19: Repair and overhaul for

apparatus used in explosive atmospheres (other than mines or explosives). — BEAMA-AEMT Ex Code of Practice.



DRAINAGE SYSTEMS

GENERAL This section considers all aspects of forecourt drainage, the risks associated with the various services on site and the treatment and ultimate disposal of the effluent. It is laid out to provide a set of guidelines, which should fulfil the necessary requirements for the safe operation of a petroleum forecourt. The guidance should be read in conjunction with the plans referenced at the end of the section which illustrate schematically a range of typical forecourts.

ASSESSMENT OF PROTECTION REQUIRED At the planning stage the environmental consequences of site operations should be evaluated. The use of groundwater vulnerability maps can identify local sensitivities to pollution and can assist in determining the optimum location of the facility and highlighting any potential hazard to the aquatic environment. Access to appropriate drainage services is of particular importance when a vehicle wash is to be incorporated.

The various areas of the site to be surfaced should be reviewed to determine whether or not there is a risk of contamination by petroleum products. The type of surface to be used can then be decided to ensure an adequate level of protection is provided for the surrounding environment.

The drainage systems should be designed to convey potentially contaminated materials to suitable disposal points. This approach should provide a cost-effective solution and enable a comprehensive and effective management regime to be implemented.

Examples of typical area assessments are shown below. Area Contamination possible? Surface quality Drainage routing

Tanker fill position Yes Impermeable Via separator Pump Island Fill positions

Yes Impermeable Via separator

Under the canopy Yes Impermeable Via separator Perimeter Unlikely Permeable Surface water drains Car parking Unlikely Permeable Surface water drains Access & Egress None Permeable Surface water drains It should be noted that the above are illustrative only and are not intended to be definitive. Full consultation should be carried out with the relevant authorities to ensure that the ground water risk for the site is established and also the availability and suitability of foul and surface water sewers are known.

FORECOURT SURFACES To provide a safe, substantial and economic surface in forecourt areas the following factors need to be considered:

Surface quality Potentially contaminated areas should be impermeable to hydrocarbons and other liquids and should not allow seepage through or below the surface. Typically, concrete or similar highly impermeable materials such as sealed block paving will fulfil this requirement provided any associated jointing material is also impermeable and resistant to attack by petroleum products. Other areas may be surfaced with materials such as hot rolled asphalt, macadam, unsealed block paving, gravel, etc. It should be noted that, as well as the need to prevent fuel contamination of the subsoil there is a need to ensure that forecourt surfaces are sufficiently conductive to allow static electricity to leak away from vehicles being refueled. The surface of the refueling and delivery area should have a resistance to earth (under dry conditions) not exceeding 1 M !. In forecourt areas where spillage may occur the surface water drainage containment should be designed to provide an adequate number of channels and gullies so as to limit the surface travel of spilt hazardous products and prevent them reaching areas where surfaces are unprotected. The tanker stand surface should be suitable for the axle loading of a fully laden tanker and should be impervious. Gradients Forecourt surfaces should be laid to falls and gradients in accordance with the recommendations of BS 6367.

Performance of materials The performance of materials to be used for forecourt surfaces should comply with the appropriate EN or BS for the type of material proposed as well as with the requirements of the Building Regulations and the latest edition of British Standard



Codes of Practice. The skid resistance of all materials should be considered. The following materials should comply with the BS numbers indicated: — Ready mixed concrete, BS 5328 — Block paving, BS 7533: and 6717 Part 1(6), BS7533Part3 — Hot rolled asphalt, BS 594: Parts I and 2 Coated macadam, BS 4987: Parts 1 and 2

DRAINAGE SYSTEMS Consideration should be given to the following factors to ensure a safe and adequate method of controlling and containing surface run-off:

Catchment area Surface drainage catchment areas may be categorised into contaminated or uncontaminated. All forecourt surfaces areas where contamination is possible and any drainage apparatus which could receive contaminated water should be discharged via a forecourt oil separator. Effluent discharged from an oil separator to controlled waters will require the formal consent of the Environment Agency or SEPA, whilst that discharged to a sewer will require the consent of the sewerage undertaker.

Areas where contamination is unlikely may be treated separately and discharge via a by-pass type separator may be appropriate.

Canopy, kiosk and other roof drainage, unless likely to receive other extraneous contamination, may be discharged directly to watercourse without treatment. Where rodding eyes and manhole chambers for surface water have to be located in areas likely to be contaminated then they should be double sealed to prevent ingress of hydrocarbons.

The catchment areas defined above should be designed to direct all run-off towards the drainage system in an efficient manner. Material and joints of channel drains should be designed to ensure that no leakage occurs and laid to gradients that will achieve self cleansing flow velocities at design conditions.

Containment for tanker delivery areas Tanker delivery stands should be sized to accommodate a maximum size tanker with tractor unit with sufficient margin around the vehicle to contain splashing in the event of a spill.

Forecourt gradients, and perimeter drains where used, should be designed to accept a discharge at a rate of 44 litre/second over a 2 m wide section of channel without overflowing; this could be spilled over a period of about three minutes. The tanker stand should be capable of holding the residue until such time as the drainage system can accept and convey the product to the separator unit.

Grating design Gratings should be fitted that are sufficiently sized to allow the run off to be intercepted positively and freely to enter the channel. Channel gratings should be continuous and uninterrupted. Channels and gratings should be installed and tested to manufacturers’ instructions. All outlets should be trapped, accessible and easily maintained. Drainage pipe-work

When considering the design of drainage pipe-work, the rainfall, proximity of high buildings and levels of surrounding land should be considered. The drainage pipe-work should be: (a) Sized to suit the storm return periods appropriate to the location and in accordance with the requirements of BS

6367 and capable of transporting a spillage from the tanker standing area at a rate of at least 15 litres/second. (b) Laid to falls determined from the calculated flow rate. (c) Sealed at all joints. (d) Resistant to the effects of light hydrocarbon liquids when tested as specified in prEN 858-1. (e) Tested in accordance with relevant Building Regulations and BS 8301. (f) Certified as complying with the regulations cited above. Manholes should be provided at each change of direction or gradient and should be sized in accordance with BS 8301. All covers and frames in vehicle circulation spaces and paved areas should be to a minimum standard of BS EN 124 Class C250.

The access and egress cross over points are normally protected by a channel line drainage system set at least 300 mm into the site, and 50 mm below cross over level. This will prevent the flow from any spillage on the forecourt, not otherwise routed to drainage, going beyond the curtilage of the petrol filling station.

A penstock or other suitable valve should be installed in the first manhole downstream of the separator capable of shutting off all flow and preventing contaminated effluent leaving the site during maintenance or emergencies. All drainage systems should be installed and maintained in accordance with manufacturers’ instructions.



Other considerations: Drainage works are subject to regulations, ranging from Bye-laws, applicable to an individual locality, to those governed by Acts of Parliament covering large areas of the United Kingdom. The latter include The Water Resources Act 1991, The Rural Water Supplies and Sewerage Acts 1961 and 1964, Water Industry Act 1991, Environment Act 1995. Materials and components are defined in BS 8301. Approved Document H of the Building Regulations 1985 and manufacturers’ literature should provide clear guidance on selection of drainage materials, design and method of construction. The colour coding of manholes to identify the difference between surface water drainage and foul drainage is advocated as an expedient towards pollution prevention, using the convention ‘red’ for foul and ‘blue’ for surface water.

OIL SEPARATION SYSTEM FOR SURFACE RUN-OFF

To provide an effective separation and storage system for contaminated waste water and spillage, all contaminated surface water drainage should be discharged to a light liquid separator system which normally comprises a separator (Class I or Class II), a sludge trap and a sampling chamber. The sampling chamber should be fitted with a manually operated shut off valve irrespective of the type of separator used. The separator system should be based on the requirements and test methods in prEN 858-1, with particular reference to material, chemical resistance, design and functional requirements.

Separators should be sized to suit the storm return periods appropriate to the location. In the UK this is based on a rainfall rate of 50 mm per hour. The inlet and outlet pipe-work diameters should be sized according to the maximum expected flow rates. Separators should be vented to atmosphere. Discharge to controlled waters

Where a discharge is being made direct to controlled waters, consent from the Environment Agency or SEPA is required and a Class 1 Separator with automatic closure device and maximum level alarms should be installed. Class 1 separators of this design will normally be fitted with a coalescing filter. The minimum capacity of the separator should be adequate to contain at least the maximum contents of a compartment of a road tanker likely to deliver petrol at a filling station.

Discharge to foul sewer Where a discharge is being made to a foul sewer a Class 2 separator should be fitted. Discharges to public sewers usually require the consent of the Water Company and may, if a vehicle wash is involved, require a Trade Effluent Agreement under Section 118 of the Water Industry Act 1991. Separators and silt traps should be installed in accordance with manufacturers’ instructions.



REFERENCES (a) Included in the text:

— Approved Document H of the Building Regulations, 1985. — BS 594: Parts 1 and 2. Hot rolled asphalt for roads and other paved areas, 1992. — BS 4987: Parts 1 and 2. Coated macadam for roads and other paved areas, 1993. — BS 5328: Guide to specifying concrete. — BS 6367: Code of practice for drainage of roofs and paved areas, 1983. — BS 6717: Part 1 (6). Specification for paving blocks, 1993. — BS 7533: Part 3. Code of practice for laying concrete, 1989.

— BS 8301: Code of practice for building drainage, 1985. — BS EN 124 Class C250: Gullet tops and manhole tops for vehicular and pedestrian areas, 1994. — Building Regulations. — Environment Act. 1995. — Ground water vulnerability maps. — pr EN 858-1, Installation for separation of light liquids - Part 1: Principles of design -Performance testing

- Marking and quality control. — pr EN 85 8-2, Installation for separation of light liquids - Part 2. Selection of nominal size, installation,

operation and maintenance. — Rural Water Supplies and Sewerage Acts. 1961 and 1964. — Trade Effluent Agreement (Section 118 of the Water Industry Act. 1991). — Water Industry Act. 1991. — Water Resources Act. 1991.

(b) For further guidance: — Environment Agency PPG 2: Above ground storage tanks. — Environment Agency PPG 3: Use and design of oil separators. — Environment Agency PPG 7: Fuelling stations, construction and operation. — Environment Agency PPG 13: High-pressure water and steam cleaners.



Details of a typical petrol service station and its Drainage arrangements



MAINTENANCE AND IN-SERVICE TESTING

GENERAL Maintenance or testing work should only be undertaken by people who are competent to undertake such work. Work should only be undertaken with the prior authorisation of the site operator (or appointed agent) who has the responsibility to control the activities of people working on the site. The authorisation should state clearly the scope of the work to be done and define the period for which it is valid. If the nature of the work does not create a hazard, the authorisation may cover the whole duration of the work. All work should be controlled to minimise the risks to site staff, visiting contractors and members of the public from fire or explosion hazards, to ensure the safe containment and control of petroleum products and their vapours and to ensure the continued integrity of plant, equipment, and services. Hot work or any activity likely to cause sparks should not be carried out within 4 m of a hazardous area. If hot work is necessary within a hazardous area, then written permission in the form of a work permit should be given by a person competent to give such authority. Before issuing a work permit, it will be necessary for the competent person to detail the necessary control measures to ensure the work can be carried out safely. Section 6 gives further advice and procedures for carrying out maintenance activities safely. Records of all maintenance work carried out should be completed showing the extent of work, faults detected and rectification or modification carried out. Such records should be prepared by the contractor and handed to the site operator for retention, on completion of the work.

TANKS Following the commissioning of an underground tank, routine tank testing will not be necessary unless a risk assessment shows a particular need. If a leak is suspected it should be investigated. In such cases, a test to confirm whether or not the tank is sound will help determine whether to decommission the tank or consider a repair. The method of test used, will depend on the type of tank, its installation and an assessment of risks to the safety of people or damage to the environment. Above ground tanks should be examined in accordance with the guidance in HS(G) 176.

Methods of testing For above ground tanks a visual inspection of the tank shell by a competent person together with a check for signs of product within the bund will generally be adequate to determine whether or not a leak exists. In difficult cases it may be necessary to carry out a leak test. For underground tanks, test methods based on precision testing techniques should be used wherever possible. Such forms of testing take account of the many uncontrolled variables which a simple hydrostatic test cannot; they are more reliable and have a greater chance of identifying a leak or false alarm than the latter.

PIPEWORK During the lifetime of an installation, a test of pipe-work may be necessary if a leak is suspected. In such a case, a test to confirm whether or not a particular line is sound should be undertaken so that a decision can be made as to whether to replace or repair the line. The method of test used will depend on the type of pipe and its installation.

Methods of testing Any physical testing of lines which contain or have contained petrol or its vapours has the potential to create a hazard. Accordingly, it is essential that all procedures to be used are fully documented, all equipment is certified for use in hazardous atmospheres and all operatives are adequately trained and certified as such.

ELECTRICAL INSTALLATION All electrical equipment on the site should be subject to an inspection and testing program to establish that it is in accordance with the requirements of this document and statutory requirements relating to the storage and dispensing of petroleum. The amount of work and the time required to verify the electrical installation at an existing petrol filling station will, depend on the presence of electrical records for the site, including drawings, schedules of previous test results, etc, and the type of petrol dispensing equipment installed. The site MUST be closed during the inspection and test of both its main switch-gear and hazardous area(s). Prior arrangements should be made for closure of the site and where necessary all computer systems should be properly ‘logged off ’ and shut down. An initial survey of the electrical installation and electrical equipment at the petrol filling station should first be carried out and the results recorded on an Inventory Checklist and Initial Assessment forms. This will lead to a determination of the installation status. Where the inspection or testing reveals a dangerous or potentially dangerous situation on an item of electrical equipment which requires immediate attention, the details should be identified in writing and handed to the site operator for action. The



site operator should sign for the receipt of this notice which should be retained with other site electrical records. The details of this notice should be recorded, together with any other defects and presented with the overall report.

REFERENCES — BASEEFA Standard SFA 3002: 1971. — BS 7117: Part 1: Electrical certification. Metering pumps and dispensers to be installed at filling stations and used

to dispense liquid fuel. — Environment Agency PG 1/14(96), Maintenance of vapour recovery equipment. — HS(G) 176, The storage of flammable liquids in tanks, 1998. — United States, EPA Standard test procedure for evaluating leak detection methods.

TESTING TANKS

Where a leak is suspected the tank should be tested using a method appropriate to the installation. Test methods based on precision testing techniques should be used wherever possible. Such forms of testing take account of the many uncontrolled variables which a simple hydrostatic test cannot. They are therefore more reliable and have a greater probability of identifying a leak or false alarm than the latter.

Generally precision test methods will be certified as complying with the United States EPA Standard test procedure for evaluating leak detection methods and operators of such systems should demonstrate that the operating criteria specified by any such certification, including any limitations, are strictly adhered to.

If for any reason a test is conducted under conditions outside the limitations of the evaluation certificate, the test report will need to state the limitation(s) that have been exceeded together with details of any supporting calculations or increase in the data collection period etc. to confirm that the test complies with the US EPA protocol. Precision tests generally fall into one of two broad categories: (a) Volumetric methods use techniques which detect any change in the height of liquid in the tank to define a leaking

or tight tank. Typically such tests provide a measurement of the leak rate.

(b) Non Volumetric tests do not rely on detecting a change in height measurement to determine a leaking or tight tank, and typically provide a pass or fail result. Examples of this type of test are those applying a vacuum to the tank or those using chemical trace elements.

It is essential that any electrical equipment employed is certified to an explosion protection standard suitable for the zone in which it is used. It is recommended that independent assessment of the performance is provided.

Method statements and operating protocols should always be available with precision test methods. These are necessary to ensure that the appropriate test considerations and qualifications pertinent to such tests are fully addressed at the time of testing. The method statements should clearly identify particular factors that have to be considered and which may affect the accuracy of the test including: — water table measurement and compensation; — positions of sensory probes within or outside the tank in order to detect leakage; — procedures for testing multi-compartment tanks; — minimum certified product levels for testing; — compensation for climatic conditions at the time of test; — stabilisation periods for equipment or product to eliminate temperature effects; — process to compensate for fuel vaporisation in the ullage space; — means of detecting both leaks of product out of, and entry of water into, the tank.

TESTING PIPE WORK

If a leak is suspected, pipe-work and fittings should be tested using a suitable method appropriate to the installation. Typical test methods include the following:

Non-pressure lines (i.e. suction, offset fill, vent and vapour pipe-work) should be subjected to inert gas pressure of 0.7 bar(g). After pressure stabilisation the test should be continued for 30 minutes during which time there should be no loss of pressure as shown by the gauge. Whilst under pressure any non-buried joints and fittings should be wiped with soapy water or other appropriate test medium and checked for signs of leaks as evidenced by the appearance of bubbles.

Pressure lines should be subjected to a hydraulic pressure of twice the working pressure. After pressure stabilisation the test should be continued for 30 minutes during which time there should be no loss of pressure as shown by the gauge and no evidence of weeps from any visible joints or fittings.



Secondary containment pipe-work should be tested by subjecting the interstitial space to an inert gas pressure test of 0.35 bar(g). After pressure stabilisation the test should be continued for 30 minutes during which time there should be no loss of pressure as shown on the gauge. Whilst under pressure any non-buried joints and fittings should be wiped with soapy water or other appropriate test medium and checked for signs of leaks as evidenced by the appearance of bubbles. Any water used should be disposed of either through the forecourt oil separator or as contaminated waste. Other options Some alternative options for methods of test are: — hydrostatic pressure of 1 bar(g) applied on lines full of water; — gas low pressure testing using a helium/nitrogen mix in association with a helium sensing device; — any other line testing system having a performance capability at least equal to any of the foregoing.

INSPECTING AND TESTING THE ELECTRICAL INSTALLATION

A periodic inspection and testing program should be carried out to determine whether or not the condition of the electrical installation and equipment at the petrol filling station, and in particular within hazardous areas, is satisfactory. The following scheduled items should, as a minimum, be inspected and tested to assist in the completion of the certificate. The test results, categorised defects and observations should be recorded in the site electrical records. Test instruments used must be suitable for the areas tested. On no account should earth loop impedance or PSCC test instruments be used other than as described in Section 14.10.2.2 (d).

Inspection A general visual inspection of the site should be made prior to testing. This should include verification of the electrical equipment Inventory Checklist (Annex 14.6) and the initial assessment (Annex 14.7). If these records are unavailable or changes have occurred then a new record must be produced and the appropriate inspection program number selected. Inspection should verify that all relevant items of equipment are recorded on the Inventory Checklist. Equipment should be constructed to relevant British or equivalent Standards and not damaged such as to impair safety or proper operation.

Functional checks An operational check should be made of: — every publicly accessible emergency switch, which should also be checked to ensure it cannot re-energise the

supply; — every operator controlled emergency stop button; — every fireman’s switch (for H.V. discharge lighting); — the P.A./speaker systems; — tanker stand lighting, also check location of luminaries with respect to tanker position. Main distribution Where applicable, secure isolation/restoration should be made as necessary for testing earth fault loop impedance, main polarity, earth electrode, insulation resistance, RCD tripping, current leakage and isolation of systems. An internal visual inspection of the switch and the distribution equipment can be made at the same time.

Hazardous areas To facilitate the testing of the insulation resistance of the pump/dispensing equipment supply and data cabling where no automatic disconnection is provided, access should be gained to the means of manual disconnection by opening or removing appropriate covers. Dispenser pump hydraulic housing covers or other relevant covers, as necessary, should be removed to expose earth terminals so that earth continuity can be measured with respect to main earth terminal after allowing time for any fuel vapour to disperse. Before replacing external covers a visual inspection should be carried out without the need to remove or disturb components, in particular checking the following points: (a) Name plate details: Accredited certification mark, Certificate standard number (e.g. BS71 17: Part 1). (b) Explosion protection suitable for Zone of installation. (c) Damage or other defects which might impair safety. (d) Equipment clear of dirt, dust and rubbish (leaves etc.). (e) Evidence of fuel leakage. (I) Incoming cables are of suitable type and accessible duct/pipe seals appear satisfactory. (g) Visible gaskets and seals appear satisfactory. (h) Condition of enclosures and fastenings.



(i) Lamps serviceable and of correct rating and type. (j) Evidence of unauthorised or undocumented repairs or modifications including ‘add ons’. (k) Maintenance appears to be adequate and properly documented. (1) Earthing and bonding arrangements and tightness of terminations. (m) All cables and their glanding appear in order. (n) Cables and other fixtures clear of moving parts. (o) Explosion protected equipment integrity, i.e. for Ex’p’ equipment, check that the air mover is operational, that the

static pressure is correct and the air outlet unobstructed and for Ex’d’ equipment only - test tightness of flame paths with feeler gauge.

(p) Wear or un-due running noise of pump motor bearings e.g. lateral movement of shaft or signs of overheating. (q) Where applicable excessive mechanical running noise. (r) Refit covers, checking they are properly located and gasket seals are adequate, re-energise. (s) Where applicable, suitability of the electrical installation and equipment within any structure sited within or opening

onto the hazardous area.

General electrical installation (items not covered above) The results of the inspection should be recorded on a suitable inspection checklist which should be retained with the site electrical records. All deviations noted should be recorded on the Inspection and Test.

Guidance on periodic testing procedures All electrical equipment at the petrol filling station should be subject to annual inspection and testing to establish that it is in accordance with the Electricity at Work Regulations (see clause 14.10.1). Where the inspection and/or testing reveals a dangerous situation the site operator should immediately be informed, in writing, of the action to be taken to remove the danger. This situation should also be noted in the site electrical records with a recommendation to the site operator that the enforcing authority be informed immediately. Where site modifications, which may affect safety or operation of the electrical installation, are carried out subsequent to issue of a Test Certificate, the installation as a whole should be checked in accordance with the relevant verification program. For modifications not affecting the consent, only the items concerned in the modification require verification and recording as an ‘interim inspection’. If it is not possible to carry out any of the recommended tests this should be stated in the test schedule.

Earth fault loop impedance/earth electrode resistance testing Test equipment which injects high levels of current to earth other than at a test point specifically provided for that purpose should not be used. This includes instruments for testing earth fault loop impedance, high current continuity and prospective fault current testers and some portable appliance testers. Insulation resistance testing of electrical circuits Warning: Insulation resistance tests must not be conducted on any circuit where there is risk of damaging the associated equipment unless suitable means of disconnection is provided to prevent such damage.

General description Insulation resistance tests are to be carried out with an insulation resistance test instrument sited in the non-hazardous area. The purpose is not only to check the integrity of the insulation but also to monitor its condition. Deterioration may be evident if resistance readings are noticeably lower than those taken previously. For this reason reference should be made to the site electrical records and to the data recorded on the last test schedule. For each circuit cable a test of 500V dc. shall be applied between each conductor and each other conductor including the metallic sheath/armouring. The resultant reading should be greater than 10 M" for the insulation to be considered adequate. All readings should be compared with previous test records. Readings below 10 M" and any reading showing a noticeable reduction since the last test should be treated as suspect and appropriate action taken. For example, a cable showing less than 11 M" which on its last test certificate was in excess of 15 M" is deteriorating and may well become unsafe within a year. The important factors are firstly that readings should exceed 10 M" and secondly that no noticeable change has occurred since the last recorded test. Subject to proper safety procedures being employed, as an alternative to insulation resistance testing, the 50 Hz ac. leakage current in a circuit when energised at supply voltage may be measured using a suitable clamp meter and the value recorded on a test schedule for future comparison. The value of leakage current should be appropriate for the type and length of cable and the type of equipment being tested. Any excessive value should be treated as suspect and should be investigated.

Working procedures



The equipment to be tested should be made safe by isolation of electrical energy at the origin of the circuit and proved dead. This includes all forms of remote secondary supply (e.g. from inverted dc. battery power). The means of isolation should be secured in the “off’ position, i.e. all live conductors (including neutral) being isolated.

Testing from the non-hazardous area (a) The circuit loads of petrol pump/dispensing equipment and of associated equipment should be disconnected by the

means provided by the manufacturer.

Note: The means of disconnection may be automatic, once the mains supply has been switched off at the source; or manual, requiring the test engineer to use the means of disconnection at the load equipment.

(b) It should be ensured that any data isolation switches relative to the equipment are in the “off’ position (isolated). Failure to do this may damage the control point equipment connected to fuel dispensing equipment.

(c) Checks should be carried out, particularly with fuel dispensing equipment, to ensure that no other circuits have been added to the dispensing equipment since the initial installation. Any peripherals may not be listed in the manufacturer’s instructions (e.g. auxiliary battery back-up, additional data cables for credit card readers).

If additional circuitry exists which is not listed in the manufacturer’s instructions then the manufacturer of the additional equipment should be contacted to ensure that means of disconnection have been provided via the original means of disconnection in the dispensing equipment, or otherwise. Full details should be entered in the site electrical records if not previously recorded.

(d) In any event, all electrical conductors should be securely isolated and proved dead before the tests are carried out.

(e) The tests as previously described should be carried out directly on the load side of the circuit breaker/data-link isolators, within the non-hazardous area.

If gaining access to the test terminals does not expose live terminals, only the circuit subject to testing needs to be isolated. The results are to be noted with special reference made to any reading which is either below l0 M", or significantly low when compared with the last recorded test. This information should be entered on the electrical test schedule and retained in the site electrical records. Unacceptable readings should be identified and a recommendation made for appropriate remedial work.

Selection and use of test instruments If test instruments are to be used in the hazardous area, they should be certified as intrinsically-safe for use in petroleum vapours. When an insulation resistance tester applies 500 V d.c. to conductors a charge will be stored within the cable due to capacitance. This charge could remain after the tester has been disconnected, or it could prove incentive if the charged cable discharges via a fault. Most modem insulation resistance test instruments have a built-in discharge facility which is always operational except when the test button is depressed. Where this facility is not available, the cable should be discharged from within the non-hazardous area.

Note: The intrinsically safe certification of test instruments applies only to the test instrument itself. When used on any circuit which could store electrical energy the act of testing is not intrinsically safe.

Important: The method of testing depends on which type of test instrument is used (see below).

Earth continuity testing All tests should be directly referenced to the site earth terminal in the non-hazardous area. Because of the nature of the test, vehicular access in the vicinity of the equipment being tested should be prohibited and the wander lead itself safeguarded.

With a certified intrinsically-safe test instrument The wander lead of known resistance is connected to the site earth terminal in the non-hazardous area. The other lead is then connected to the earth bonding terminal of the equipment subject to test. With the connection made, the test instrument may be activated and the resistance reading obtained. Before removing the test lead the instrument must be de-activated.

Note: The intrinsically-safe certification of test instruments applies only to the test instrument itself When used on any circuit which could store electrical energy the act of testing is not intrinsically safe.

With a non-intrinsically-safe test instrument The wander lead of known resistance is reliably connected to the earth bonding terminal of the equipment subject to test. For equipment not certified to BS 7117: Part I, the test is made at a reliable earth point. The test is carried out in the non-hazardous area by connecting the other end of the wander lead to the site earth terminal via the test instrument. The resistance reading is obtained. Before removing the test lead the instrument must be de-activated. This procedure is necessary to prevent the possibility of sparking whilst making or breaking test connections.



Test results Test results should be compared with those previously recorded on the test schedule. In any event, the resistance obtained should generally be less than 0.1 " (after the known resistance of the wander lead has been deducted). Readings which are above the expected figure or have increased noticeably since last being tested should be identified and if necessary investigated.

Insulation resistance testing of forecourt equipment sited inside the hazardous area

Dispensing equipment other than that certified to BS 7117. Part 1: 1991 Dispensing equipment certified to SFA 3002: 1971, or BS 7117: Part 1:1989, can only be tested in accordance with the manufacturer’s instructions since normally no provision for the safe disconnection of loads has been included. In this respect, it is essential that the dispensing equipment manufacturer is contacted since many of the original versions of manufacturers’ instructions may describe methods which are now not considered safe or acceptable. The up-to-date instructions should be used. The model, its age and its method of construction will determine whether or not the dispensing equipment can be tested in a safe manner. If it is not possible to carry out all of the required tests, this should be stated in the applicable section of the site electrical records. Uncertified dispensing equipment with no certifying authority approval for use in hazardous areas should be reported to the site operator and noted in the site electrical records with a recommendation that the enforcing authority be informed immediately. Dispensing equipment certified to BS 711 7. Part 1: 1991 This dispensing equipment has provision included to enable the insulation tests to be carried out from a non-hazardous area. They fall into one of two types for means of disconnection i.e.: — Those which include automatic means of disconnection. — Those which include manual means of disconnection.

The British Standard requires the dispensing equipment to carry a label indicating which type of disconnection is provided. (a) Type (1) - Automatic means of disconnection (auto-disconnectors) Dispensing equipment incorporating this system requires no access to the internals of the dispensing equipment to enable the tests to be carried out. Once the power is isolated at the distribution board in the non-hazardous area, the automatic disconnector in the dispensing equipment disconnects all the dispensing equipment loads without isolating cables and circuits within the hazardous zone which are subject to the test. The test can be carried out directly from the distribution board in the non-hazardous area (see ‘Testing from the non-hazardous area’). Note: Dispensing equipment internal computer battery back-up systems, if provided, may remain energised unless the

manufacturer’s instructions specifically state otherwise.

(b) Type (2) - Manual means of disconnection Dispensing equipment without automatic means of disconnection will incorporate some form of manual disconnection. In these circumstances the means of disconnection is at the dispensing equipment and may involve a specific procedure for safety to be observed. Access to the manual means of disconnection will have been provided. The manufacturer’s instructions will identify the access means, the means of disconnection itself and any necessary procedure to ensure safety whilst the test is in progress.

Note: Where the means of access involves the removal of external covers or cladding which themselves provide ingress and/or hazardous area protection the following safeguards apply:

— The manual means of disconnection should not be accessed until the dispensing equipment has been isolated from the supply. This includes the isolation of any internal battery supply.

— Testing is not permitted until the access cover or cladding has been replaced and the manufacturer’s procedures for insulating disconnected conductors (if applicable) have been complied with.

Remote pumping units A remote pumping unit can be considered in the same way as conventional fuel dispensing equipment with an internal pumping unit. The cables will either route through the remote pumping unit to the dispensing equipment or through the dispensing equipment to the remote pump unit. Those certified to BS 7117: Part 1: 1991 have means of disconnection included (automatic or manual). Those not certified to BS 7117: Part 1:1991 can only be tested in accordance with the manufacturer’s instructions. If modifications have been carried out the manufacturer’s revised instructions must replace the original and reference to them should be noted in the site electrical records.



Uncertified remote pumping units with no certifying authority approval for use in hazardous areas should be reported to the site operator and noted in the site electrical records with a recommendation that the enforcing authority be informed immediately.

Submersible pumping units Unless a unit incorporates an automatic means of single pole disconnection, it is only possible to carry out an insulation resistance test between all live conductors connected together and earth on a submersible pump. Manual means of disconnecting live conductors within the submersible pumping unit are not possible. If no such device is incorporated, the fact that the insulation between live conductors cannot be tested should be recorded on the test schedule and retained with the site electrical records.

Tank gauge systems Insulation tests on the cables connected to an underground tank gauge should only be carried out in accordance with the manufacturer’s instructions. The method indicated by the manufacturer will include a means of disconnection at the probe (automatic or manual). If a safety barrier is incorporated within “Ex” equipment in the hazardous area, an approved means of disconnection has been incorporated to allow the test to be carried out. It will sometimes not be possible to carry out the insulation resistance test. If so, this should be noted on the Test Certificate (see Intrinsically-safe systems below).

Intrinsically-safe systems (typically used for tank gauge and leak detection systems) The safety barrier should normally be located in the non-hazardous area. Cables feeding systems which are certified intrinsically-safe and other equipment should be tested up to the input connections to the safety barrier. If the safety barrier is within a hazardous area or the system is not certified intrinsically-safe, the insulation resistance tests should not be carried out unless a certified means of disconnection is incorporated. It will sometimes not be possible to carry out the insulation resistance test. If so, this should be noted on the Test Certificate and in the site electrical records.

Leak detection systems These carry a safety certification. If certified intrinsically-safe, only the conductors up to the safety barrier are subject to the test.

Insulation resistance testing of forecourt equipment sited outside the hazardous area These tests are carried out in conjunction with the inspection of the hazardous area. Typical examples are: (a) fuel dispensing equipment integral lighting; (b) fuel dispensing equipment audio system; (c) canopy lighting; (d) forecourt audio system; (e) pole sign; (f) car wash/jet wash equipment; (g) vacuum cleaning equipment; (h) coin or token operated airline; (i) diesel or kerosene dispensing equipment; (j) credit card readers; (k) note acceptor units; (l) closed circuit television; (m) driver control delivery unit.

This is not an exhaustive list.

Examples (a) and (b) above: Circuits which are extensions of dispensing equipment are covered by the means of disconnection provided within the fuel dispensing equipment where these have been supplied as part of the dispensing equipment system certified to BS 7117: Part 1:1991, and not added by an independent company at a later date. Otherwise they should be considered as being part of the group of examples listed above as (c-in).

Examples (c-m) above: The means of disconnection will almost certainly be outside the hazardous area, therefore requirements for disconnection should be as defined in clause 14.6. It is necessary to ensure that the area in which the equipment on test is sited does not temporarily become a hazardous area, for example by the position of a road tanker during delivery. The areas of hazard as defined in this document should be correctly identified before equipment is isolated and subjected to an insulation resistance test.


Appendix C page 1 of 8

APPENDIX C – EAC PETROLEUM CODES AND STANDARDS

The Interim Working Paper set out a number of detailed codes and standards principles consistent with the findings of the High Level task Forces in 2005 and 2006. These were passed to RBS in January 2009.

The consultant spent a day at RBS in February investigating the present status of technical codes and standards for petroleum under consideration in RBS. This work was communicated in part after the previous visit but this appendix summarises the findings of this work.

RBS – Petroleum Standards

Visit on 5th February 2009

1. Persons Met:

Mukeshiyaremye Athenasie Head of Standards Unit +0788483788

[email protected]

Uzaribara Ernest – Agricultural Products Standards Officer 0750208261

0788681090

[email protected]

Mporanzi Samuel Mechanical and Metallurgical Standards Officer +2500780565977

[email protected]

Muranzi Raymond Chemical and Environmental Standards Officer +2506788747256

2. EA Standards

IGT was given access to electronic versions of some EAC standards on petroleum that are to be incorporated into Rwandan standards in next 3 to 6 months. All are based on international ISO standards. They were mainly to do with petroleum terminology, qualities and definitions + a large number of IP/ ASTM tests rather than codes of practice on larger engineering facilities such as depots, road vehicles or filling stations. They all have a subsidiary ICS classification (see Item 5 below) in the 75 series, which I did not record.

Incorporation of all these standards is a very important first step for Rwanda and the bedrock of a petroleum standards system, however it does not immediately facilitate the introduction of any engineering codes or standards for the key areas of the petroleum supply chain that have been identified by the high Level Task Forces. It may be noted that the lists does include specifying QA systems for suppliers.

The short-term availability of specialised test equipment and the necessary training to carry out some of these complicated tests is questionable and overcoming this must be a priority for RBS.

IGT was not allowed to take any copies due to copyright.



Lists of EA standards to be adopted by RBS (with the original American spelling retained):

EAS 640-1-2008 Petroleum industry — Terminology — Part 1: Raw materials and products

EAS 640-2:2008 Petroleum industry — Terminology — Part 2: Properties and tests

EAS 640-3:2008 Petroleum industry — Terminology — Part 3: Exploration and

Production

EAS 640-4:2008 Petroleum industry — Terminology — Part 4: Refining

EAS 640-5:2008 Petroleum industry — Terminology — Part 5: Transport, storage, distribution

EAS 640-6:2008 Petroleum industry — Terminology — Part 6: Measurement

EAS 640-7:2008 Petroleum industry — Terminology — Part 7: Miscellaneous terms

EAS 640-99:2008 Petroleum industry — Terminology — Part 99: General and index

EAS 641:2008 Standard test method for lead in gasoline by atomic absorption Spectroscopy

EAS 642:2008 Standard test method for benzene in motor and aviation gasoline

by infrared spectroscopy

EAS 643:2008 Standard test method for determination of oxygenates in gasoline

by gas chromatography and oxygen selective flame ionization detection

EAS 644:2008 Standard test method for determination of benzene and toluene in

finished motor and aviation gasoline by gas chromatography

EAS 645:2008 Standard test method for vapor pressure of gasoline and gasoline oxygenate blends (Dry method)

EAS 646:2008 Petroleum products — Corrosiveness to copper — Copper strip

Test

EAS 647:2008 Petroleum liquids — Manual sampling

EAS 648:2008 Petroleum liquids — Automatic pipeline sampling

EAS 649:2008 Petroleum products — Determination of distillation characteristics

at atmospheric pressure

EAS 650:2008 Crude petroleum and liquid petroleum products — Laboratory

determination of density — Hydrometer method

EAS 651:2008 Petroleum products — Determination and application of precision

data in relation to methods of test

EAS 652:2008 Petroleum products — Determination of the ignition quality of diesel fuels — Cetane engine method

EAS 653:2008 Petroleum products — Determination of carbon residue — Ramsbottom method

EAS 654:2008 Petroleum and liquid petroleum products — Tank calibration by liquid measurement — Incremental method using volumetric meters

EAS 655:2008 Petroleum and liquid petroleum products — Equipment for measurement of liquid levels in storage tanks — Manual methods

EAS 656:2008 Standard test method for research octane number of spark-ignition

engine fuel



EAS 657:2008 Standard test method for motor octane number of spark-ignition

engine fuel

EAS 658:2008 Petroleum products — Gum content of light and middle distillate

fuels — Jet evaporation method

EAS 659:2008 Petroleum products — Determination of foaming characteristics of

lubricating oils

EAS 660:2008 Gasoline — Determination of oxidation stability of gasoline —

Induction period method

EAS 661:2008 Crude petroleum and petroleum products — Determination of

density — Oscillating U-tube method

EAS 662:2008 Petroleum products — Determination of sulphur content of

automotive fuels — Ultraviolet fluorescence method.

EAS 663:2008 Petroleum products — Determination of sulphur content of

automotive fuels — Energy-dispersive X-ray fluorescence

spectrometry

EAS 664:2008 Standard test method for determination of aromatic hydrocarbon types in middle distillates-high performance liquid chromatography method with refractive index detection

EAS 665:2008 Petroleum, petrochemical and natural gas industries — Sector specific

quality management systems — Requirements for product and service supply organizations

EAS 666:2008 Petroleum products — Determination of colour (ASTM scale)

EAS 667:2008 Determination of flash point — Pensky-Martens closed cup method

EAS 668:2008 Petroleum products — Transparent and opaque liquids —

Determination of kinematic viscosity and calculation of Dynamic Viscosity

EAS 669:2008 Petroleum products and bituminous materials — Determination of

water — Distillation method

EAS 670:2008 Crude petroleum and fuel oils — Determination of sediment —

Extraction method

EAS 671:2008 Petroleum products — Calculation of cetane index of middle distillate

fuels by the four-variable equation

EAS 672:2008 Petroleum products — Determination of ash

EAS 673:2008 Petroleum products — Determination of carbon residue —

Conradson method

EAS 674:2008 Petroleum products and lubricants — Neutralization number —

Potentiometric titration method

EAS 675:2008 Petroleum products — Determination of acid number — Semi-micro

colour-indicator titration method

EAS 676:2008 Petroleum products — Determination of carbon residue — Micro

Method



EAS 677-1:2008 Diesel fuel — Assessment of lubricity using the high-frequency

reciprocating rig (HFRR) — Part 1: Test method

EAS 677-2:2008 Diesel fuel — Assessment of lubricity using the high-frequency reciprocating rig (HFRR) — Part 2: Limit

EAS 678:2008 Petroleum products — Determination of the oxidation stability of middle-distillate fuels

EAS 679:2008 Petroleum products — Determination of water — Coulometric Karl Fisher titration method

EAS 680:2008 Petroleum products — Determination of alkyl nitrate in diesel fuel

Spectrometric method

EAS 681:2008 Petroleum products — Determination of cloud point

EAS 682:2008 Petroleum products and lubricants — Determination of cone penetration of lubricating greases and petrolatum

EAS 683:2008 Petroleum products — Calculation of viscosity index from kinematic viscosity

EAS 684:2008 Petroleum products and crude petroleum — Determination of

vapour pressure — Reid method

EAS 685:2008 Petroleum products — Determination of thiol (mercaptan) sulfur in light and middle distillate fuels — Potentiometric method

EAS 686:2008 Petroleum products — Determination of the smoke point of Kerosene

EAS 687:2008 Petroleum products — Determination of pour point

EAS 688:2008 Petroleum products — Transparent and opaque liquids — Determination of kinematic viscosity and calculation of dynamic viscosity

EAS 689:2008 Petroleum products — Determination of base number — Perchloric acid potentiometric titration method

EAS 690:2008 Petroleum products — Determination of lead content of gasoline — Iodine monochloride method

EAS 691:2008 Liquid petroleum products — Determination of hydrocarbon types

Fluorescent indicator adsorption method

EAS 692:2008 Crude petroleum and liquid or solid petroleum products —

Determination of density or relative density — Capillary-stoppered

pyknometer and graduated bicapillary pyknometer methods

EAS 693:2008 Petroleum products — Determination of boiling range distribution

Gas chromatography method

EAS 694-1:2008 Petroleum products — Determination of saponification number — Part 1: Colour-indicator titration method

EAS 694-2:2008 Petroleum products — Determination of saponification number — Part 2: Potentiometric titration method

EAS 695:2008 Petroleum products — Determination of water — Potentiometric Karl Fischer titration method

EAS 696:2008 Petroleum products — Determination of dropping point of lubricating greases (wide temperature range)



EAS 697:2008 Petroleum products — Determination of water separability of petroleum oils and synthetic fluids

EAS 698-1:2008 Petroleum and liquid petroleum products — Calibration of vertical cylindrical tanks — Part 1: Strapping method

EAS 698-2:2008 Petroleum and liquid petroleum products — Calibration of vertical cylindrical tanks — Part 2: Optical-reference-line method

EAS 698-3:2008 Petroleum and liquid petroleum products — Calibration of vertical cylindrical tanks — Part 3: Optical-triangulation method

EAS 698-4:2008 Petroleum and liquid petroleum products — Calibration of vertical cylindrical tanks — Part 4: Internal electro-optical distance-ranging method

EAS 698-5:2008 Petroleum and liquid petroleum products — Calibration of vertical cylindrical tanks — Part 5: External electro-optical distance-ranging method

EAS 698-6:2008 Petroleum and liquid petroleum products — Calibration of vertical cylindrical tanks — Part 6: Recommendations for monitoring, checking and verification of tank calibration and capacity table

EAS 699-1:2008 Petroleum products — Fuels (class F) classification — Part 1: Categories of marine fuels

EAS 699-2:2008 Petroleum products — Fuels (class F) — Classification — Part 2: Categories of gas turbine fuels for industrial and marine applications

EAS 699-3:2008 Petroleum products — Fuels (class F) — Classification — Part 3: Family L (Liquefied petroleum gases)

EAS 699-99:2008 Petroleum products — Fuels (class F) — Classification — Part 99: General

EAS 700:2008 Petroleum products — Fuels (class F) — Specifications of marine fuels

EAS 701:2008 Petroleum products — Determination of sulfur content — Energy dispersive X-ray fluorescence spectrometry

EAS 702:2008 Crude petroleum and liquid petroleum products — Volumetric metering of viscous hydrocarbons

EAS 703:2008 Petroleum products — Determination of aluminium and silicon in fuel oils — Inductively coupled plasma emission and atomic absorption spectroscopy methods

EAS 704:2008 Petroleum products and lubricants — Determination of rust prevention characteristics of lubricating greases

EAS 705:2008 Petroleum and liquid petroleum products — Direct static measurements — Measurement of content of vertical storage tanks by hydrostatic tank gauging

EAS 706:2008 Crude petroleum and petroleum products — Bulk cargo transfer — Guidelines for achieving the fullness of pipelines

EAS 707-1:2008 Petroleum and liquid petroleum products — Calibration of horizontal cylindrical tanks — Part 1: Manual methods

EAS 707-2:2008 Petroleum and liquid petroleum products — Calibration of horizontal cylindrical tanks — Part 2: Internal electro-optical distance-ranging method

EAS 708-1:2008 Petroleum products — Determination of the filterability of lubricating oils — Part 1: Procedure for oils in the presence of water

EAS 708-2:2008 Petroleum products — Determination of the filterability of lubricating oils — Part 2: Procedure for dry oils



EAS 709:2008 Petroleum products — Determination of sulfur content — Wavelength-dispersive X-ray fluorescence spectrometry

EAS 710:2008 Petroleum products — Determination of particulate content of middle distillate fuels — Laboratory filtration method

EAS 711:2008 Petroleum and liquid petroleum products — Determination of volume, density and mass of the hydrocarbon content of vertical cylindrical tanks by hybrid tank measurement systems

EAS 712:2008 Petroleum and related products — Preparation of a test portion of high-boiling liquids for the determination of water content — Nitrogen purge method

EAS 713:2008 Petroleum and related products — Determination of the shear stability of polymer-containing oils using a diesel injector nozzle

EAS 714:2008 Standard test methods for analysis of lubricating grease

EAS 715:2008 Standard test method for determination of oxygenates, benzene, toluene, C8-C 12 aromatics and total aromatics in finished gasoline by gas chromatography/Fourier transform infrared spectroscopy

EAS 716:2008 Standard test method for vapor pressure of petroleum products (Automatic method)

EAS 717:2008 Standard test method for hydrocarbon types in middle distillates by mass spectrometry

EAS 718:2008 Standard test method for rapid field test for trace lead in unleaded gasoline (Colorimetric method)

EAS 719:2008 Standard test methods for lead in gasoline by X-ray spectroscopy

3. Kenya Standards from KEBS 2007 catalogue

Petroleum Electrical installations KS 1968:2006 covers layout + design of bulk depots

Petroleum KS1967:2006 bulk depots

KS1969:2006 filling stations

Petroleum Products KSISO 3171:1988

Gasoline KS2060:2007

Gasoline unleaded KS275-2:2003

Occupational Safety KSISO14123-1:1998

KSISO14123-2:1998

Terms KSISO1998-5:1999

Pipe fittings KS06-217:1981

e-mail [email protected]

web http://www.kebs.org

Copies of Kenyan were standards apparently not available at RBS - to be checked on next visit as some look relevant for adoption in Rwanda.



4. Websites/ contacts for East African standards bureaux

Rwanda www.rwanda-standards.org

Uganda [email protected]

www.unbs.go.ug

Tanzania [email protected]

www.tbstz.org

Burundi [email protected]

[email protected]

Zambia [email protected]

[email protected]

5. EAC catalogue headings

These are basically international classification system (ICS) headings. Code 75 = Petroleum and related technologies

75.020 Extraction and processing of petroleum and natural gas

75.060 Natural Gas

75.080 petroleum Products in general

75.100 Lubricants and industrial oils and related products

75.120 Hydraulic fluids

75.140 Waxes, bituminous materials and other petroleum products

75.160 Fuels

75.160.01 Fuels in general

75.160.10 Solid fuels

75.160.20 Liquid fuels

EAS 158:2000 gasoline (petrol) unleaded specification (RON 95)

EAS 177:2000 automotive diesel specification

Gaseous fuels

Equipment for petroleum and natural gas industries

75.180.01 Equipment for petroleum and natural gas industries in general

75.180.10 Exploratory: drilling and extraction equipment

75.180.20 Processing equipment

75.180.30 Volumetric equipment and measurements

75.180.99 Other equipment for petroleum and natural gas industries

75.200 Petroleum products and natural gas handling equipment



6. Relevant Zambian Codes

Petroleum Unleaded ZS 395 – unleaded

Petroleum products ZS 369 – diesel

ZS 370 – leaded

ZS 396 – sampling

ZS 380 – kerosene for illumination

Petroleum Products storage ZS 381 - storage tank specs ICS 23.020.10 K130.000

ZS 392 – storage and handling liquid fuel large consumer installations

Pt 1 < 1500 l K70.000

Pt 2 other K150.000

Petroleum products

Distribution ZS385 - code of practice ground bulk tanks installation

Petroleum products

Distribution – LPG ZS 429 - code of practice storage and filling of LPG < 9kg + other parts

Petroleum products

Transportation ZS 371 - road tank vehicles for petroleum based flammable liquids

ZS 372 - road tanks code of practice operational requirements for road tank vehicles ICS:10.200 K111.000

Avtur ZS 394 ICS:13.300; 080.10; 75.200; K 200.000

All of these were available in the library at RBS but IGT was not allowed to take copies. This looked like a very promising start for Rwanda.

The South African sources for the principal Zambian standards are as follows:

ZS 371:1999 is based on SABS 1398:1994

ZS 372:1999 is based on SABS 0231:1997

ZS 385 Pt 1 is based on SABS 081:1999

The sources for ZS 385 Pt 3, ZS 372 and ZS 394 did not appear to be given in the respective prefaces but they may be referenced elsewhere (e.g. where standards are split into one or more parts).

I did not have time to look in detail at ZS 392 or 429 (LPG) or ZS 381 (tanks) during the visit. ZS 381 is potentially important and this action should be carried forward.

The basic product specs appeared to be very similar to ISO specs but again there was not time to verify this thoroughly.


Appendix D - 1 of 25

APPENDIX D – DRAFT PETROLEUM LAW

This Appendix contains the text of the Final Draft of the Petroleum Law after input from the Minster in October 2009. This still requires some editing as for example the contents list no longer lines up with the agreed text. The draft Law is under consultation with other ministries and industry and may be modified as a result.

THE PETROLEUM SUPPLY DRAFT LAW, 2009.

THE PETROLEUM SUPPLY LAW, 2009 determining the supervision and monitoring of the petroleum supply sector in Rwanda and for the licensing and control of activities and installations, for the safety and protection of the public and the environment in petroleum supply operations; and to encourage and protect fair competition in petroleum supply. TABLE OF CONTENTS CHAPTER 1 – GENERAL PROVISIONS

Article 1: Name of Law Article 2: Purpose of this Law Article 3: Applicability of Law Article 4: Definition of Terms

CHAPTER II - OVERSIGHT AND ADMINISTRATION Article 5: Responsibility of Ministry Article 6: The Petroleum Special Unit Article 7: Staffing of Petroleum Special Unit Article 8: Appointment/ Dismissal of Director of the Petroleum Special Unit Article 9: Functions of the Petroleum Special Unit Article 10: Petroleum Committee Article 11: Functions of Petroleum Committee

CHAPTER III - PETROLEUM CONSTRUCTION PERMITS AND PETROLEUM OPERATING LICENCES.

Article 12: Petroleum Permits and Licences Article 13: Procedure for Obtaining Petroleum Permits and Licences Article 14: Renewal of Petroleum Permits and Licences Article 15: Competent Authority Article 16: Payment of Fees for Permits and Licences Article 17: Use of Experts



Article 18: Regular Reports on Overall Permitting and Licensing Position in Sector Article 19: Period of Validity of Permits and Licences Article 20: Assignment Article 21: Suspension or Revocation by Competent Authority Article 22: Display of Permits and Licences Article 23: Duplicate Permits and Licences Article 24: Right of Appeal to Courts over Decisions of Competent Authority Article 25: Construction Permits Article 26: Issues a Competent Authority Must Take Into Account Article 27: Suspension or Revocation Of A Construction Permit by Ministry Article 28: Compliance with Technical Standards Article 29: Oil Spills and Major Incidents Article 30: Safe Parking Article 31: Designated Competent Authorities Article 32: Records and Notices Article 33: Rights of Access and Inspection by Authorities

CHAPTER IV - THE NATIONAL PETROLEUM INFORMATION SYSTEM. Article 34: National Petroleum Information System

CHAPTER V - MARKET STRUCTURE AND ACCESS TO MARKET Article 35: Open Participation In Petroleum Supply Chain Article 36: Fair Competition Article 37: Non-Discriminatory Access to Market Article 38: Further Regulations To Achieve Third Party Access To Infrastructure

CHAPTER VI - PROTECTION OF PUBLIC SAFETY AND THE ENVIRONMENT Article 39: Adoption of International Standards Article 40: Environmental Impact Assessments Article 41: Emergency Petroleum Supply Plan Article 42: Minimum Working Stocks Article 43: National Strategic Stocks

CHAPTER VIII - CONTRAVENTIONS AND SANCTIONS Article 44: General Penalties Article 45: Penalties for Infringement of Renewal of Permits or Licences Article 46: Penalties for Selling Adulterated Petroleum Products Article 47: Penalties for Not Holding Sufficient Working Stocks Article 48: Liabilities of Directors, Officers and Employees Of Licensed Companies



Article 49: Failure To Comply With Health Safety and Environmental Regulations Article 50: Oil Spill Regulations Article 51: Third Party Liability of Licencees or Permit Holders Article 52: Failure To Regulate Parking Safely

CHAPTER IX - MEDIATION AND APPEALS PROCESS

Article 53: Mediation by Petroleum Special Unit Article 54: Appeals Above Petroleum Special Unit To Ministry Article 55: Appeals Above Ministry To Courts

CHAPTER X - MISCELLANEOUS

Article 56: Liability Of Individual Members Or The Director Of The Petroleum Special Unit Article 57: Powers To Make Further Decrees and Regulations Article 58: Prior Acts and Transitional Period Article 59: Repeal of Potentially Inconsistent Provisions

Article 60: Commencement



THE PETROLEUM SUPPLY LAW, 2009. CHAPTER 1 – GENERAL PROVISIONS

Article 1: Name of Law This Law may be cited as the “Petroleum Supply Law, 2009”.

Article 2: Purpose of this Law The objectives of this Law are to-

1. Ensure that petroleum supply in Rwanda is adequate, reliable, efficient and economical for the country and the

consumers according to the prevailing conditions at any given time;

2. Strengthen the institutional capacity of the Government in order to better formulate and implement petroleum

supply policies;

3. Improve petroleum governance by clarifying the functions of institutions responsible for petroleum supply and to

make the operations of those institutions more accountable and transparent;

4. Ensure public safety and protection of public health and the environment in all petroleum supply operations and

installations;

5. Ensure effective delivery of petroleum products and services to consumers and to ensure equal access to

petroleum products of adequate quality at competitive prices for all consumers;

6. Encourage and promote fair competition within the petroleum supply market, to eliminate discrimination or

preferential treatment of any participant and to prevent monopolistic control of any segment of the supply chain;



7. Create favourable conditions for operators and investors in order to increase the diversification of the sources of

supply, to improve services and to expand the infrastructure of the supply chain; and

8. Ensure a steady supply of petroleum products by the development and maintenance of national strategic stocks

and by obliging participants in the market to carry working stocks of petroleum products in excess of those

required for normal operations by way of contingency.

Article 3: Applicability of Law (1) This Law applies to the import, transportation, processing, supply, storage, distribution, wholesale and retail sale

and sale to industrial consumers of petroleum products and related activities and installations in Rwanda.

(2) The provisions of this Law relate to petroleum products and liquefied petroleum gas (LPG).

(3) This Law does not apply to the upstream permitting or licensing for exploration or production of hydrocarbons in

Rwanda.

Article 4: Definition of Terms In this Law, unless the context otherwise requires-

`

“Committee”, an abbreviation for “Petroleum Committee” that advises the ministry on petroleum matters,

“Competent Authority” means the person or organization that has the legally delegated or invested authority to perform a designated regulatory function under this Law

“Consolidated Fund” means a designated account in ?at the National Bank of Rwanda.

“Distribution” means the ownership, operation, management or control of distribution facilities for movement or

delivery of petroleum products to consumers;

“Emergency Petroleum Supply Plan” means the Emergency Petroleum Supply Plan approved in accordance with

article;

“Environmental impact assessment” means a systematic examination conducted to determine whether or not a

project will have any adverse impact on the environment; and includes environmental reviews, environmental

evaluations and environmental impact studies and all related procedures including plans to mitigate any adverse

environmental impacts;



“Government Strategic Stocks” means petroleum products kept in storage in Rwanda by or on behalf of the

Government under article for purposes of security of supply;

“Licence” means a petroleum operations licence issued under article 12;

“Licensee” means the holder of a licence;

“Minister” and “Ministry” means respectively, the Minister and the Ministry of the Government responsible for

petroleum supply;

“National standard” means a standard produced or adopted and made public by the standards authority for use in

Rwanda,

“Order” means a written direction issued by the Ministry under this Law;

“Permit” means a petroleum construction permit issued under article;

“Petroleum” means any naturally occurring hydrocarbon or mixture of naturally occurring hydrocarbons, whether in

gaseous, liquid, or solid state;

“Petroleum products” means any liquid petroleum, fuel and any lubricant, whether used or unused, and includes

any other substance which will be used for a purpose for which petroleum fuel or any lubricant may be used;

“Petroleum supply operations” means all operations and activities for or in connection with the importation,

loading, unloading, processing, transportation, storage, distribution, wholesale or retail of petroleum products,

including the operations of industrial consumers who buy their products directly from importers or wholesalers;

“Reference price” is a price determined from time to time by the Ministry under this Law for such petroleum

products as he deems necessary, as set out in article 36. It does not necessarily bear relationship with any tax

reference price that may be determined by the revenue authority.



“Supply chain” means all operations, activities, installations, equipment and other facilities directly or indirectly

related to the petroleum supply operations;

“Throughput” means the average volume of product handled or consumed or both;

“Working stock” means petroleum products kept in storage in Rwanda by participants in the supply chain for

trading purposes as defined in article 42.

CHAPTER II - OVERSIGHT AND ADMINISTRATION

Article 5: Responsibility of Ministry (1) The Ministry shall be responsible for the implementation of this Law.

(2) The Ministry shall have the following specific functions in relation to this Law-

(a) to initiate legislation and make the necessary regulations in order to support and promote a

continuous, secure and adequate supply of petroleum products at competitive cost for all consumers

and to create favourable conditions for the availability of adequate import, transport, storage and

distribution facilities within or, if necessary, outside Rwanda;

(b) to promote the increase of opportunities for regional petroleum trade and encourage a diversity of

supply sources, routes and means of transportation;

(c) to approve the Emergency Petroleum Supply Plan

(d) to ensure the establishment, maintenance and periodic updates of the National Petroleum

Information System and the evaluation and dissemination of the information derived from the

National Petroleum Information System in accordance with this Law;

(e) to monitor the effectiveness and equitability of the licensing system for petroleum supply operations

and installations in accordance with this Law;



(f) to organise and coordinate the implementation of, and the observance of the principles of the free

market and fair competition in co-ordination with other Government agencies in accordance with this

Law;

(g) to manage national strategic petroleum stocks on behalf on the Government;

(h) to monitor compliance with industry’s obligations to maintain adequate working stocks in accordance

with this Law; (e) perform any other function given to the Ministry by this Law as it may be

amended from time to time;

(f) to bring about any further regulations to enhance this Law, by Ministerial Decree or otherwise,

generally as provided for in article 57.

(3) There shall be created appropriate structures and committees as is being required by this law and in accordance

with laws governing the functioning of the public sector.

CHAPTER III - PETROLEUM CONSTRUCTION PERMITS AND PETROLEUM OPERATING LICENCES. Article 6: Petroleum Permits and Licences

(1) No person shall perform petroleum supply operations (importation, re-exportation, wholesale, retail, storage or

transportation) without having obtained a petroleum operating licence under this Law.

(2) No vehicle shall be used for the purpose of transporting petroleum unless there is in force in respect of that

vehicle a valid licence for the use of that vehicle to use the roads for that purpose.

(3) Nothing in this Law precludes any potential licensee from discussing the contemplated construction or operation

of petroleum pipelines, retail facilities or storage facilities or the start-up of new import activities with the Petroleum

Special Unit, the Competent Authority or the Ministry prior to filing a permit or licence application.

Article 7: Procedure for Obtaining Petroleum Permits and Licences

(1) To obtain a permit or a licence for one or more activities in the supply chain or for a renewal or assignment of a

permit or licence, the applicant shall submit to the relevant Competent Authority a written application in the

prescribed format.



(2) The procedure for submission of applications and for evaluating, processing and approving or rejecting the

applications and the particulars to be submitted by the applicant for the purpose shall be prescribed by Ministerial

Decree.

(3) During the processing of an application, evaluation, approval or rejection, all applicants shall be treated equally

without any discrimination or preferences. However, the Competent Authority may require or impose any terms or

conditions which are not specified under this Law, but which are provided for in a Ministerial Decree or by applicable

codes or standards.

(4) Any approval by the Competent Authority required under this article in relation to a permit or licence shall not be

unreasonably withheld or delayed and the permit or license shall be issued within a period not exceeding thirty days

from the date of submitting the application.

(5) An applicant for a permit or a licence or for the renewal or assignment of a permit or licence shall pay an

application fee to the Competent Authority prescribed by regulations.

Article 8: Renewal of Petroleum Permits and Licences

(1) An application for the renewal of a permit or licence shall be made at least thirty days before the expiry date of

the then current licence and must be accompanied by the prescribed fee.

(2) If the Competent Authority is satisfied that the applicant continues to meet the requirements for the issue of the

permit or licence the Competent Authority shall renew the permit or licence.

(3) If an application for the renewal of the licence has been made before the expiry date of the permit or licence but

has not been dealt with by the Competent Authority when the licence is due to expire, the licence shall continue

in force until the application for renewal is dealt with and any renewal in such a case shall be taken to have

commenced from the day when the licence would have expired.

(4) A permit or licence shall specify the nature of the petroleum business and the premises at which the licensee

may conduct his business and where a petroleum business is conducted at more than one premise, a separate

licence shall be required for each of such premises.

Article 9: Competent Authority



A Competent Authority may, subject to this Law, grant or reject any application under this article. Where the

Competent Authority refuses to grant a permit or licence, the applicant shall be given an explanation in writing for

the action taken.

Article 10: Payment of Fees for Permits and Licences

(1) Upon the approval of a permit or a license, the applicant shall pay a fee in the manner prescribed by Ministerial

Decree.

Article 11: Use of Experts

(1) The Competent Authority, with the agreement, and at the expense of the applicant, may at its discretion employ

experts for the purpose of evaluating applications for permits or licences.

(2) The amounts and the terms of payment of the fees and the reimbursement of expenses for experts under sub-

section (1) shall be as may be agreed with the applicant.

(3) If no agreement is reached with the applicant concerning the selection or compensation of any expert, the

Competent Authority may reject the application.

Article 12: Regular Reports on Overall Permitting and Licensing Position in Sector (1) At the end of each month, the Petroleum Special Unit shall forward to the Ministry a list of all applications for

permits and licences submitted during that month and the action taken by the relevant Competent Authority on the

applications, and shall provide additional information as requested by the Ministry

(2) Information and particulars furnished with an application and classified as confidential by the applicant shall not

be published or otherwise disclosed by the Petroleum Special Unit, the Competent Authority or any other person

obtaining knowledge of them without prior consent of the applicant.

Article 13: Period of Validity of Permits and Licences

(1) A permit shall be valid for five years or until the completion of the work in question and the acceptance of the

work according to the procedure prescribed by Ministerial Decree, whichever is sooner, but may be extended for

five years upon the payment of the prescribed fee if this has been agreed in the terms of the permit.



(2) An operating licence shall be valid for a period not exceeding 3 years in the case of import and re-export

licences, 10 years in the case of retail filling stations and 25 years in the case of bulk storage depots, LPG bottling

plants or petroleum pipelines, more particularly as prescribed from time to time by Ministerial Decree, depending on

the type of activity to which it relates, and may be renewable, in accordance with conditions prescribed by Decree,

subject to payment of the prescribed fee.

Article 14: Assignment (1) No permit or licence may be assigned by or otherwise transferred from the holder to another person or

company without the prior approval in writing of the Competent Authority and subject to the payment of the

prescribed fee.

(2) The Competent Authority, may on application by any of the following circumstances, transfer a licence or a

permit, at its sole discretion:

(a) in case of death of the licensee or permit holder, to the legal representative of such licensee or

permit holder;

(b) in the case of bankruptcy of the licensee or permit holder to the lawfully appointed trustee or legal

successor;

(c) in case of a corporation to the lawfully appointed liquidator;

(d) in any case where the licensee becomes subject to a legal disability, to any person legally appointed

to manage his/her affairs.

(3) The Competent Authority shall satisfy itself of the legal, technical and financial competence of the

transferee to carry out the undertaking.

(4) The transferee shall undertake in writing to comply with the licence conditions.

(5) The Competent Authority shall not withhold any consent to any application for assignment in the

circumstances prescribed in sub-section (2) unless it has reason to believe that public interest is likely

to be prejudiced by the transfer.



Article 15: Suspension or Revocation by Competent Authority

Notwithstanding any other remedies or penalties for offences provided for under this Law or any other enactment-

(a) a permit or licence may be suspended by the Competent Authority acting either on its own authority

or on recommendations from the Ministry where there are reasonable grounds to suspect a

contravention of any provision of this Law or any other enactment concerning the protection of

occupational health, public safety and the environment or for any other reason stated by or under

this Law;

(b) a permit or licence may be revoked by the Competent Authority acting on recommendations Ministry

where there are reasonable grounds to suspect that the holder fails to remedy or repeats any

contravention of any provisions of this Law or regulations made under this Law concerning the

protection of occupational health, public safety and the environment, or for any other reason

specified by or under this Law.

Article 16: Display of Permits and Licences

Every permit or licence shall except when lodged with Competent Authority for the purposes of this Act, be

displayed in a prominent position on the premises in respect of which it is issued.

Article 17: Duplicate Permits and Licences

Where, upon application, it is shown to the satisfaction of Competent Authority that a licence has been lost,

destroyed or defaced, the Competent Authority shall upon payment of a prescribed fee issue a duplicate licence to

the licensee.

Article 18: Right of Appeal to Courts over Decisions of Competent Authority

A person aggrieved by the actions of the Competent Authority in

(a) refusing to renew or grant a licence or revoking a licence; or

(b) imposing conditions on a licence



may within thirty days of receipt of written notification of such actions in writing, appeal to the Rwanda Commercial

Court, whose decision shall be communicated to the aggrieved party in due course.

Article 19: Construction Permits

(1) Any person intending to construct a pipeline, bulk storage facility, LPG bottling plant or retail dispensing site

shall before commencing such construction, apply in writing to the Competent Authority for a permit to do so.

(2) The application under sub-section (1) shall:

(a) Specify the name and address of the proposed owner; and

(b) be accompanied by the appropriate number of copies of plans and specifications for that class of

facility.

(3) The Competent Authority shall consider every application received and shall if satisfied that the applicant meets

prescribed requirements, grant to the applicant within thirty days, the permit to construct the bulk storage facility or

retail dispensing site as the case may be.

(4) The permit may be subject to such conditions as may be prescribed

(5) Where the Competent Authority refuses to grant a permit under sub-section (3) it shall notify the applicant of

such refusal in writing specifying reasons therefore and shall deliver such notice to the applicant either personally or

by registered post.

Article 20: Issues a Competent Authority Must Take Into Account (1) Before issuing a permit, the Competent Authority shall take into account all relevant factors, including but not

limited to the following

(a) relevant Government policies and regulations;

(b) compliance with environmental management and safety codes and standards including an

environmental impact assessment and proposal to mitigate any impacts identified and occupational

health and safety procedures;



(c) relevant standards and measurements;

(d) the financial capability of the applicant and the methods of financing the proposed facility; and

(i) any other matter in the opinion of the Competent Authority that may be affected by the granting

or the refusal of the permit being sought, including but not limited to:

(ii) size and use of land including access to roads or highways

(2) A permit shall contain such terms and conditions as the Competent Authority may deem appropriate,

including but not limited to:

(a) duration of the permit;

(b) persons authorised to execute the works;

(c) area in which the works shall be executed; and

(d) conditions to be satisfied before the commencement of the works.

Article 21: Suspension or Revocation of a Construction Permit (1) Subject to sub-section (2) below, the Competent Authority in consultation with the ministry may suspend or

revoke a construction permit if any term or condition thereof has not been complied with within the prescribed

period.

(2) Where the competent authority intends to revoke or suspend a permit it shall at least within twenty days before

the date on intended revocation or suspension, notify the holder of the permit of such intention, specifying the

reasons thereof.

(3) The competent authority may in writing reinstate the permit suspended or revoked in sub-section (1) of this

article if satisfied that the reasons for suspension or revocation no longer exist.

Article 22: Compliance with Technical Standards



(1) Petroleum products imported into Rwanda and equipment, facilities and installations shall conform to relevant

Rwanda Codes of Practice and standards. Where no Codes of Practice or standards exist, the relevant international

standards approved by Rwanda Bureau of Standards from time to time shall apply.

(2) A person who offers for sale, transports or stores petroleum products meant for use in Rwanda shall ensure

that the specifications of such petroleum products are in accordance with sub-section (1) above.

Article 23: Oil Spills (1) In the event of oil spilling, in the course of operating a petroleum facility or transportation of petroleum, either by

accident or through negligence, the operator or person transporting petroleum shall forthwith clean up the polluted

or damaged environment, to the satisfaction of the competent authority

(2) If the operator or person transporting petroleum fails, or un reasonably delays, to carry out the work referred to

in sub-section (1) the competent authority may cause any work not carried out to be executed at the expense of the

said operator or person transporting petroleum

Article 24: Safe Parking

At or near petroleum depots and other places where petroleum tankers converge, The Competent Authority shall

designate a place or places exclusively reserved for parking such vehicles.

Article 25: Records and Notices

(1) Every holder of a permit or licence shall maintain such records as are required to be kept by or under this Law

and under the relevant tax codes and shall furnish to the Competent Authority and the Ministry such reports and

information as may be required to be forwarded by or under this Law.

(2) The holder of a permit or licence shall maintain an address in Rwanda to which communications may be sent

and shall give written notice to the Ministry and the Competent Authority of that address and of any change in that

address.

CHAPTER IV - THE NATIONAL PETROLEUM INFORMATION SYSTEM.

Article 26: National Petroleum Information System



(1) An information system to be known as National Petroleum Information System is to be established For the

purposes of monitoring and evidence-based policy making in petroleum sector

(2) The National Petroleum Information System shall be organised and maintained by the Ministry.

(3) The National Petroleum Information System shall consist of, but not limited to, an integrated and centralised

database and information system covering all petroleum supply operations and installations, the principal market

activities and statistics of Rwanda as well as international reference data.

(4) For the purposes of this article all licensees shall submit to the Ministry periodic reports and other information as

prescribed by regulations.

CHAPTER V - MARKET STRUCTURE AND ACCESS TO MARKET

Article 27: Open Participation In Petroleum Supply Chain

Any person, whether Rwandan or foreign, may participate in all or any activities of the supply chain, subject to this

Law and any other applicable laws and statutory license requirements as may exist from time to time.

Article 28: Fair Competition

(1) Participants in the petroleum supply chain shall not form cartels or attempt to control prices or create artificial

shortages of products or services, or engage in any other restrictive trade practices or any other acts or omissions

which are contrary to the principles of fair competition or are intended to impede the functioning of the free market

for petroleum products in Rwanda.

(2) Except as otherwise provided by regulations, participants in the supply chain shall sell their products and offer

their services to all interested persons without undue delay and without any form of deliberate discrimination by

means of quality, quantity or price or other conditions and restrictions which cannot be justified under legitimate

commercial or operational grounds.

(3) The Petroleum Special Unit shall monitor the conditions of the market and the trade practices of the participants

in the supply chain under this Law;



(4) The reference prices used for monitoring of prices under this article shall be calculated by the Ministry according

to a formula established by order of the Ministry after consultation with the Committee.

(5) The reference prices shall be updated from time to time.

(6) If on the advice of the Petroleum Special Unit, the Ministry is satisfied that there is in existence any restrictive

trade practice or any other act or omission contrary to this article, the Ministry may intervene in the public interest

and take any such action as may be necessary to address the situation. This shall be without prejudice to the

liability of any person to prosecution.

(7) In this article “reference price” means the price used by the Ministry to establish whether the price of a

petroleum product is excessive or not, at its sole discretion.

Article 29: Regulations to Achieve Third Party Access to Infrastructure and market

a. At its sole discretion, the Ministry may cause to be introduced regulations that ensure non-

discriminatory third party access to infrastructure in any part of the petroleum system and introduce

a system of regulated tariffs for the use of storage, pipelines, bottling plants for LPG and any other

infrastructure over which any participants in the industry may enjoy a monopoly position or undue

commercial advantage.

b. There shall be made a distinction between depots operated for personal use and depots operated

for commercial or public use. The ministry shall put in place a regulation governing commercial

depots

c. The Minister may cause to be introduced such other regulatory measures aimed at opening of the

market or consumer protection as he or she deems necessary.

CHAPTER VI - PROTECTION OF CONSUMER RIGHTS, PUBLIC SAFETY AND THE ENVIRONMENT

Article 30: Adoption of International Standards

(1) The ministry in collaboration with relevant Government departments and agencies shall develop and implement

or cause the implementation of a programme of gradual adoption and adaptation of the prevailing international

standards, technical specifications and codes of practice in relation to the petroleum supply industry, as established



by the standards developing organisations which are recognised by the international petroleum industry in matters

of quality, industrial safety and environmental protection.

(2) Where the relevant international standards, specifications or codes of practice have not been formally adopted

according to sub-section (1), the Competent Authority may, after consultation with the Committee and the Rwanda

Bureau of Standards, approve the temporary application of standard specifications and codes of practice by

reference to any international standard.

Article 31: Environmental Impact Assessments

(1) The competent authority shall conduct environmental impact assessments and audits and implement other

requirements for environmental protection along the petroleum supply chain in accordance with applicable laws.

(2) the competent authority shall prepare a classification of petroleum operations and projects and prepare

guidelines and a programme for environmental impact assessments and audits.

(3)

Article 32: Calibration [RBS to help with the drafting of this section and article 32]

CHAPTER VII - CONTINGENCY, COMPULSORY AND STRATEGIC STOCKS

Article 33: Emergency Petroleum Supply Plan

(1) In order to anticipate and respond to interruptions in, or serious distortions of, the petroleum supply, occasioned

by accidents, political disturbances, natural disasters or similar events or by the negligence of any person, the

ministry shall, in cooperation with other Government departments and agencies, the Committee and participants in

the supply chain, prepare an emergency petroleum supply plan.

i. Where the Ministry is satisfied that any of the events described in sub-section (1) has occurred, the Ministry may,

by statutory order declare that a petroleum supply emergency has occurred.

ii. The ministry shall monitor the implementation of the Emergency Petroleum Supply Plan, adjust it or take any

other measure as and when necessary during the implementation



Article 34: Minimum Working Stocks

(1) In order to enhance the security of the petroleum supply of Rwanda, every importer who holds a licence under

this Law shall at his expense, maintain minimum working stocks of petroleum products at the levels as prescribed

from time to time by Ministerial Decree. The minimum working stocks remain the property of the importer and will be

made available for sale at the time the importer wishes to exit the industry

(2) For the purposes of this article, the minimum working stocks shall include all petroleum products held in storage

depots in Rwanda and shall exclude petroleum products-

(a) in transit within Rwanda or to and from any other country;

(b) held in retail service or filling stations; and

(c) held in consumer storage locations.

(3) Conditions under which the operator may hold volumes of stocks under the minimum compulsory levels shall be

prescribed by ministerial decree

Article 35: Government Strategic Stocks

(1) The Government shall, at its expense, maintain strategic stocks of petroleum products,

(2) Government strategic stocks are intended to be used during the emergency as defined under Article 33

(3) However, government strategic stocks may be released in the following and other circumstances to be

prescribed by ministerial decree:

(a) Recycling/renewal after a such period determined by ministerial decree

(b) Change in standards required

(c) Need to create ullage

Article 36: Decision to release/sell government strategic stocks

(1) In case of emergency, and in accordance with Article 33 of this law, the ministry shall be entrusted with powers

to decide on the release/sale of government stocks.

(2) In other cases, the ministry will take such a decision upon recommendation of the committee.

(3) The minister or the permanent secretary authorise the release/sale of government strategic stocks.



CHAPTER VIII - CONTRAVENTIONS AND SANCTIONS [further work needed to be inspired by Penal Code]

Article 37: General Penalties

(1) A person who-

(a) refuses, delays or fails to produce any document or other information required to be submitted to any

authority under this Law relating to petroleum supply operations and installations or which he or she

is required to produce under this Law;

(b) knowingly or without reasonable grounds for believing it to be true, furnishes any document or

information which is false or misleading in any material particular, whether upon demand or

otherwise;

(c) endangers the functioning of the free market or the competitive supply system;

(d) resists, hinders or obstructs the Petroleum Special Unit, or any person authorised by the Petroleum

Special Unit to enter or inspect any premises or area or to stop and search any vehicle or vessel or

to examine any books, accounts or other records, or to otherwise discharge his or her functions and

rights under this Law;

(e) publishes or otherwise discloses any information which is confidential; or

(f) refuses, delays or fails to comply by wilful misconduct or by negligence with any order, prohibition,

direction, demand, requirement or notice lawfully made, served, published or otherwise given under

this Law;

commits an offence.

iii.A person convicted of an offence under sub-section (1) is liable, on conviction, to a fine not exceeding five million

Rwanda francs or a maximum term of imprisonment of exceeding five years or both.



iv.A person who constructs, uses, or makes use of any installation or facility in the supply chain without a valid permit

or breaches any term or condition of the permit issued to him, or infringes any compulsory technical national or

international standard issued by the Rwanda Bureau of Standards in respect of petroleum commits an offence and

is liable, on conviction, to a fine not exceeding five million Rwanda francs or a maximum term of imprisonment of

five years or the withdrawal of the operating licence or all three; and in the case of a continuing offence, to an

additional fine not exceeding one hundred thousand Rwanda francs for every day or part of the day during which the

offence continues.

Article 38: Penalties for Infringement of Renewal of Permits or Licences

A person who contravenes sub-section (1) of article 16 shall be liable to a fine not exceeding five million Rwanda

francs or a maximum term of imprisonment of five years or both or the withdrawal of the operating licence/ permit or

all three.

Article 39: Penalties for Selling Adulterated Petroleum Products

A person who:

(a) sells petroleum products not conforming to the relevant Rwanda standards or international standards

approved by Rwanda Bureau of Standards

(b) Stores, transports or sells adulterated petroleum,

commits an offence and shall, on conviction, be liable to a fine not exceeding five million Rwanda francs or a

maximum term of imprisonment of five years or both.

Article 40: Penalties for Not Holding Sufficient Working Stocks

A person who fails, without lawful excuse, to comply with the obligation to hold the prescribed minimum quantities of

working stocks commits an offence and is liable, on conviction, to a fine not exceeding five million Rwanda francs.

Article 41: Liabilities of Directors, Officers and Employees Of Licensed Companies

(1) Where a person charged with any offence under this Law is a body corporate, every person who, at the time the

offence is committed, was a director, manager, secretary or similar officer or agent of that body corporate, may be



charged jointly or severally in the same proceedings with the body corporate and on conviction, is liable to the

penalty prescribed for the offence.

(2) Any partner in any unincorporated enterprise, firm or joint venture shall be jointly and severally liable for the acts

or omissions of any other partner in so far as the acts concern the enterprise, firm or joint venture.

(3) Notwithstanding sub-sections (1) and (2), a director, manager, secretary or similar officer or partner or agent is

not liable under those sub-sections if he or she proves to the satisfaction of the Court that the act in question was

committed without his or her knowledge, consent or connivance, and that he or she took all necessary steps to

prevent the commission of that act, having regard to all the circumstances.

Article 42: Failure to Comply With Health Safety and Environmental Regulations

(1) A person who-

(a) being the owner or operator of, bulk liquefied petroleum gas or natural gas facility, service station,

filling station or storage depot or transporter of petroleum, fails to institute appropriate

environmental, health or safety control measures;

(b) being the owner or operators of bulk liquefied petroleum gas or natural gas facility, contravenes

the provisions of this Law or any regulations made there under relating to the construction or

operation of bulk liquefied petroleum gas or natural gas facility;

(c) being the owner or operator of a retail dispensing site or storage depot, contravenes the provisions

of this Law or any regulations made there under relating to the construction or operation of a retail

dispensing site or storage depot,

commits an offence and shall, on conviction, be liable to a fine not exceeding five million Rwanda francs, or a

maximum term of imprisonment of five years, or both.

(1) In any case where the person who contravened the provisions of this article is licensed under this Law, the

Competent Authority may suspend or revoke his license



Article 43: Tampering with seals [To be drafted with assistance of RRA]

Article 44: Oil Spill Regulations

(1) A person who, while on Rwanda’s territory discharges or allows to escape into the water:

a) Petroleum or water mixed with petroleum; or

b) Water from tanks; or

c) Water used for flushing pipes and connections; or

d) Sand used to absorb petroleum,

commits an offence and shall, on conviction, be liable to a fine not exceeding five million Rwanda francs or to a

maximum term of imprisonment of two years, or to both.

(2) In addition to the penalty imposed under the above sub-section, the person liable shall be responsible at his

own cost, for cleaning the water and restoring it to its original status.

Article 45: Third Party Liability of Licensees or Permit Holders

Any holder of a permit or licence, any consumer of petroleum product or any recognised consumer organisation may

initiate civil legal proceedings before a Court of competent jurisdiction or subject to the powers of the Director of

Public Prosecutions, file a criminal complaint, as the case may be, against any holder of a permit or licence for any

offence under this Law, if he or she has previously filed a complaint with the Petroleum Special Unit and feels

aggrieved by any act or omission of the Petroleum Special Unit in response to the complaint.

Article 46: Failure to Regulate Parking Safely [A Local Authority contravening sub-section (2.iii) of article 31 (regulation of safe parking), commits an offence and

is liable on conviction, to pay a fine of one hundred thousand Rwanda francs for each day the offence continues].

HOLD PENDING REVIEW – MAY BE OMITTED

CHAPTER IX – MISCELLANEOUS AND FINAL CLAUSES

Article 47: Rights of Access and Inspection by Authorities

(1) For the purpose of ensuring that this Law and regulations made under it are complied with, the Ministry or any

person authorised by law may, at any time during regular business hours, enter upon and inspect any area or

premises where petroleum operations or construction works for facilities of the supply chain are being performed.



(2) An inspection may be announced or unannounced but shall always be performed in the company of a

representative of the operator whose area or premises are to be inspected.

(3) A person carrying out an inspection under sub-section (1) may, inspect the works, facilities and records including

books and accounts connected with the operations of the holder of the permit or licence for ensuring that this Law is

complied with.

(4) The Ministry or any person authorised by law may, at any reasonable time stop and search any vehicle, vessel

or facility belonging to or operated on behalf of a holder of a permit or licence for the purpose of ensuring that this

Law is complied with.

Article 48: Liability of staff Any member or other person acting by the direction of the Ministry shall not be personally liable for anything done or

omitted to be done in good faith in the performance of functions vested in that person or under this Law.

Article 49: Implementation plans (1) Persons who are participants in the supply chain at the commencement of this Law shall upgrade or adjust their

operations and facilities in order to comply with the provisions of this Law. Implementation plans and timeframes to

this effect shall be prepared to the satisfaction of, and presented for approval to, the ministry. In any case

requirements for operators to hold minimum working stocks shall be fulfilled within 3 months from the

commencement of this Law

Article 50: Repeal of Potentially Inconsistent Provisions [MINIJUST TO ADVISE] (1) On the initial coming into force of this Law, the following Law shall cease to apply to the issue of permits and

licences in respect of petroleum products: “Ordinance du Rwanda-Urundi No.41/78 of 26th May 1956” on “permis d’

exploitation” or operational permit;



(2)

1. Ordinance 8/A.E of 14th January 1938 on transport of inflammables

2. Law of 17thAugust 1910 concerning weights and measurements

Article 51: Commencement This Law shall come into force on the date of its publication in the Official Gazette of the Republic of Rwanda.


Appendix E - 1 of 4

APPENDIX E – POLICY IMPLEMENTATION AND PROGRESS

Objective (Refers to Objectives in

March 2009 Draft Petroleum Policy)

Strategic Action Time frame

Responsible Institution

Verifiable indicators Progress to date

Obtain advice of likely prospectivity and on how to set up an upstream regulatory system if there are sufficient reserves to warrant this

No further progress 1) Carry out exploration research for petroleum

2 years Interested firms, MININFRA

Exploration reports

Canadian contractor engaged for second phase of survey. As yet no PSCs for either oil or gas nor any tenders for acreage.

7.1.1: To improve the upstream side of the petroleum sector in anticipation of increasing the supply of petroleum products in the country. NOTE: the latest draft of MINICOM’s Petroleum Policy omits the upstream section as it in the remit of MININFRA)

2)Strengthen cooperation with Kenyan and Ugandan authorities with a view to ensuring an uninterrupted flow of petroleum products to Rwanda

Ongoing GoR (MINAFFET, MININFRA, MINICOM)

Minutes of meetings attended between Rwandan, Ugandan and Kenyan delegates

Limited

Review the macroeconomic effect of continuing with large subsidies in the petroleum sector and thereby foregoing planned fiscal revenues

Report issued for consideration by MINICOM 7.1.2: To protect the welfare of Rwandans through price regulations and other price stabilizing measures

1) Maintain price control measures in consultation with petroleum dealers

Monthly MINICOM, MINECOFIN, MININFRA, RRA, Petroleum Marketers

Price structure available and minutes of the meetings held between the aforesaid institutions and

Price Review Committee still active


Appendix E - 2 of 4

2) Investigate the potential and advisability for the petroleum industry to purchase in bulk and minimize costs

1 year RIEPA, PSF, MINICOM, MINECOFIN

petroleum marketers

Deferred pending evaluation of difficulties with this system in Kenya

7.1.3: To establish enabling legal frame work for the petroleum sector

Drafting and promulgation of the new law specifically for the petroleum sector

10 months, first draft was available March 09. Final draft approved by Minister September 2010

MINICOM, Parliament

Copies of the draft law available

Further draft submitted to MINICOM. Management committee approved general approaches in previous draft

7.1.4: To establish standards for the petroleum sector and ensuring that they are adhered to

Setting standards and incorporating them in the legal frame work. Develop proposal for mobile testing lab to ensure compliance with product quality standards (Action IGT if there is a fifth mission)

8 months MINICOM, RBS

Copies of the established standards available

RBS to incorporate many EAC standards base on ISO. Report written about codes in neighbouring countries (see Appendix A)

7.1.5: To create safeguards for environmental protection and ensuring that

1) Instruct all petrol stations to produce environmental impact studies conducted before construction

2 months MINICOM, REMA

Environmental impact studies and health hazard and safety policies

See new draft Petroleum Law


Appendix E - 3 of 4

1) Instruct all petrol stations to produce environmental impact studies conducted before construction

See new draft Petroleum Law healthy and safe working conditions prevail in the petroleum sector

2) instruct all petrol stations to produce health hazard and safety policy for employees and customers.

2 months MINICOM, REMA

are available for all petrol stations

See new draft Petroleum Law

7.1.6: To establish mechanisms meant to mitigate problems of shortages at least in the medium term

Build more depots to stock strategic reserves to have at least 30% more capacity and possibly up to three times the present capacity (at least 90 million litres of petroleum products). Support and help develop technico-economic feasibility studies to support both additional tankage and pipeline schemes to secure lower cost supplies (action with IGT). Discuss how to obtain sponsors and funding with MININFRA

Depends when the funds are available

MININFRA, MINICOM, MINECOFIN, RIEPA, PSF, Interested investors

Depots are available

See costings of new capacity in the Report. This needs to be developed into a full scope of work for a technico-economic feasibility study with the input of MININFRA. A commercial operator has approached the Government on a confidential basis with a view to developing more storage and renting it out on a commercial basis.

7.1.7: To reduce dependence on one route only for accessing petroleum supplies

Explore and open up alternative routes to the coast. Dar Es Salaam port is already in use. Route needs to be strengthened

Depends when the funds are available

MININFRA, MINICOM

Copies of the communiqués between Tanzanian and Rwandan officials available

Reliance on single route diminished due to the need to cope with disruptions in Kenya in 2008 and early 2009.


Appendix E - 4 of 4

7.1.8: Promote use of LPG

Study barriers to entry and look at means of introducing LPG subsidies/ subsidies of appliances. Ensure regulations harmonized with Petroleum Regulations/ Energy Law

1 to 3 years Ministry of Energy

Study team started under Ministerial direction

MININFRA has shortlisted LPG consultants and received proposals on 7th October 2009. The consultant for the present project in MINICOM has provided MININFRA with copies of previous work on LPG regulation and standards for Kenya

7.1.9: Institutional strengthening of Petroleum Special Unit

Adviser to carry out study of enhanced roles and training needs

1 to 2 years MINICOM Training plan in place and followed

Roles, goals and objectives of new staff reviewed in October 2009. Human capacity building is a high priority for the PSU Ongoing – 2 new staff being interviewed and should be in post in October 2009 Human capacity building is essential and donor funds should be sought for training and exposure to oil company practices and practices in energy ministries in other countries. Recommendations made to PSU on Institutes of Petroleum who run suitable courses


Appendix F page 1 of 1

APPENDIX F – REFERENCES

* These documents were provided by MINICOM in confidence. Note: references to various petroleum codes and standards are given in the text or Appendices and are not included here. 1. “Draft Report on the Petroleum Sector Performance in Rwanda” – task force report Feb 2006 2. “Review of Petroleum Sector in Rwanda (Draft Report)” – task force report November 2006. * 3. “Pipeline Capacity Market Analysis Phase 1”, SAIC Energy, September 6th 2007 under USTDA

funding. * 4. “Workshop on October 9th 2007: Rwanda-Burundi Pipeline Capacity Market Analysis Phase 1”.

SAIC Energy, Charles Ellsworth and others. 5. “Fuel Imports to Rwanda 2006 and 2007” – spreadsheet * 6. “Pump Prices and Subsidies” – various monthly spreadsheet * 7. “Petroleum Policy” various drafts (confidential until approved by Cabinet) 8. Annexe 5 to a tender document for the “Purchase by the UK Crown Agents of some oil

products under the Japanese Grant Aid in 2005”. * 9. Memorandum for transfer of Shell-Rwanda assets including 19 petrol stations to Kenya Oil

Company on 31st January 2006, plus the Sale and Purchase Agreement between the Government of Rwanda and Shell Rwanda for those assets plus the agreement to lease the Gastata storage site to Shell dated 5th August 1999. *

10. Extract from 2007 National Audit Report on MINICOM * 11. Ugandan National Oil and Gas Policy, Feb 2008 12. Zero Draft “National Energy Policy and National Energy Strategy 2008-2012” Ministry of

Infrastructure * 13. Job specifications for members of the Special Petroleum Unit. * 14. Final Report on Civil Service Reform Programme, 2009, Adam Smith International: section on

RURA. 15. Final Draft, Rwandan Gas Act 16. Final Draft, Rwandan Electricity Act 17. ECA Report: “Propositions to be agreed for National Energy Policy and Energy Sector Strategy

Draft Discussion Paper”. August 2008 * 18. Draft Law on Competition 2007 BP 160 19. Various Kenyan Laws, including the Energy Law, the Factories Act, the Petroleum E&P Act,

and Petroleum Rules. These can be found at http://www.kenyalaw.org/kenyalaw/klr_home/ 20. Uganda Petroleum Supply Act 2003 21. EU Europa Oil Stocks: http://ec.europa/en/energy/observatory/oil/stocks_en.htm 22. “The UK Downstream Oil Market and Compulsory Stockholding”, Energy Market Consultants,

November 2003 23. “Differentiated Oil Stock-Holding Requirements in the UK”, Energy Markets Consultants (UK)

for UK Department of Energy, now DECC, June 2006. http://www.berr.gov.uk/files/file30364.pdf 24. “A Study to Develop Uniform Standards for Liquefied Petroleum Gas (LPG) Cylinders and

Other Bulk Containers, Valves and Pressure Regulators and for Associated Testing, Monitoring and Regulatory Arrangements for LPG Marketing, Storage And Handling”, W.G. Matthews and I.G. Thomson, 2003 for Kenyan Ministry of Energy.

25. Rwanda Law N° 26/2006 OF 27/05/2006 Determining and Establishing Consumption Tax On Some Imported and Locally Manufactured Products.

26. “Energy Law”, Republic of South Africa: http://www.lexadin.nl/wlg/legis/nofr/oeur/lxwezaf.htm#Energy%20law


Appendix G page 1 of 3

APPENDIX G – DFID TERMS OF REFERENCE

Technical Assistance for the Petroleum Sector Management in Rwanda

23 September 2008 –22 September 2009

1. OBJECTIVE: DFID seeks to contract a consultant to help develop the institutional capacity of the Ministry of Commerce, Trade and Industry (MINICOM) to manage the petroleum sector in Rwanda efficiently and effectively so as to ensure smooth supplies of petroleum products throughout the country (particularly for the transport sector), and minimise price fluctuations arising from volatility in international markets. 2. RECIPIENT: Recipients of the assignment are the Government of Rwanda (GoR) and DFID Rwanda. The primary recipient Ministry will be MINICOM. The Petroleum Special Unit within MINICOM is the operating section within MINICOM responsible for day-to-day management of the petroleum sector. Other key Ministries and agencies involved in the sector at various points are the Ministry of Infrastructure (MININFRA), the Ministry of Finance and Economic Planning (MINECOFIN), the Rwanda Revenue Authority (RRA), and ASSIMPER, an association of private sector stakeholders. 3. SCOPE OF WORK: The consultant is required to work on the following tasks:

• Review the petroleum sector in Rwanda • Work under the direct supervision of the Secretary General to strengthen the Petroleum Special

Unit in MINICOM. • Mentor the staff in the Petroleum Special Unit and advise on suitable professional technical and

management training. • Help finalise a national policy, strategic plan and legal and regulatory framework for the petroleum

sector in line with best practice standards internationally • Put in place systems to manage government strategic stocks • Put in place systems to manage and account for the Japanese donor aid to the sector. • Develop an efficient institutional framework for the sector • Develop pricing strategy in the context of the East African Community (EAC) • Advise on bulk purchasing and public private partnership initiatives

4. OUTPUTS: The consultant will produce the following main outputs:

• An inception report immediately following the initial visit to Rwanda reviewing the petroleum sector and informing DFID and the GoR of a time-bound work plan to meet the requirements of the terms of reference.

• Jointly with the GoR, a comprehensive policy, strategic plan and legal and regulatory framework

for the petroleum sector that is in line with best regional and international standards.

• Systems to manage petroleum stocks and Japanese non-grant aid to the sector.



• A strategy for an efficient institutional framework for the petroleum sector, including sustainable

capacity within MINICOM to manage the sector. • The following items, before the end of the assignment in Rwanda:

o A draft report on the assignment including findings accomplishments and recommendations for future action.

o Presentations to DFID, MINICOM and other stakeholders (including civil society) of the principle findings and recommendations.

5. SPECIFIC TASKS/ ACTIVITIES: The consultant will prepare a detailed work plan following the initial visit to Rwanda, specifying a time-bound schedule of activities to be undertaken to achieve each of the main outputs as set out in section 4 above and relating these to the relevant outcomes in the national results framework for the Economic Development and Poverty Reduction Strategy (EDPRS). (This task to be discussed with DFID’s Programme Officer and MINICOM). 6. METHODOLOGY

The consultants will determine the most appropriate methodology, including the allocation of tasks between each other, activities will include but not limited to:

• Interviews with key stakeholders, and partners • Desk review of documents • Field visits, for which the Government will provide transport • Presentations to DFID and local stakeholders • On the job mentoring of Rwandan staff

7. REPORTING and DFID Co-ordination:

The consultants will report jointly to the Secretary General of MINICOM and Cyriaque Harelimana, Programme Officer, DFID Rwanda. Tony Polatajko, the Deputy Head of DFID Rwanda, will provide technical advice during the assignment. Reports to DFID will be required following each visit by the consultant to Rwanda, clearly setting out progress to date, challenges, and recommendations for further action. 8. TIMING: 60 working days over a period of 12 months. To start on 23 September 2008 and finish by 22 September 2009. 9. BACKGROUND: Rwanda depends entirely on importer petroleum products. Most of her imports transit through the Northern Corridor from Mombasa. Total monthly consumption is slightly higher than 15 million (all types of fuel combined). The total storage capacity of 30,365m3 covers only 2 months of consumption needs. Government has a vision to encourage bulk purchasing which stands to be operationalised. Efforts towards bulk purchasing will depend on the availability of storage facilities. There are four (4) storage facilities: one (1) private facility totalling 5500m3 and three (3) Government facilities totalling 24,865m3 (82% of total capacity) of which one facility of 15,912m3 (52% of total capacity) is leased to a private operator. The private and leased facilities are used by both the dealers and



the government. Government stock petroleum products comprised of strategic stock and Japanese Fuel Grant (fuel donated and to be sold to raise funds for development projects). The Ministry in charge of Infrastructure is involved in the building and rehabilitation of government storage facilities. Currently, the same ministry leads in the construction of a pipeline from Eldoret via Kampala to Rwanda. But at the same time, private investors are being encouraged to invest in these infrastructure projects. MINICOM plays an active role in mobilizing funds and investors to build the pipeline and extend storage capacity in the country. The management of petroleum sector on a daily basis is the responsibility of the MINICOM. In order to enable the Ministry carry out this responsibility, in 2006, Cabinet approved the creation of a Petroleum Special Unit (with 2 staff to start with). MINICOM has established a mechanism of consultation, dialogue and negotiation with the dealers organized in their association called ASSIMPER. Other stakeholders in government such as MINECOFIN, MININFRA, RRA, and outside Government such as the transporters also participate in the forum. Meetings are held at least every end of month to agree on pump prices that are going to prevail for the following month. There is an agreed upon price structure which is used for the purpose. The structure has a built-in formula that has made it possible for Government to limit the impact of fuel price increase globally. Currently, the petroleum sector policy is being drafted. The draft zero has been produced which needs further refining before it is tabled to stakeholders for validation. Currently, there is no law regulating the sector. .

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