Security deposit for LPG cylinders in Oman from December 2024

LPG Gas Cylinder Insurance in Oman from December 2024

Muscat: Consumers in Oman must pay an insurance amount for the first time when purchasing a liquefied petroleum gas (LPG) cylinder from December 6, 2024, the Ministry of Commerce, Industry and Investment Promotion(MoCIIp) said on Monday.

Qais Mohammed Al Yousef, Minister of MoCIIP, issued a Ministerial Resolution No. 185/2024 for regulating the filling and selling of LPG cylinders. The new decision repealed previous decisions, namely 15/88 prohibiting the sale of LPG cylinders except in licenced warehouses and 11/94, a regulation regulating the sale, maintenance, and replacement of damaged ones.

The new regulation, which will come into force 180 days from its publication in the Official Gazette, aims to ensure the supply chain and clarify each company’s identity and the route of distribution of cylinders to the final consumer.

Deposit amount for the cylinder with an identification

The regulation governing the practice of filling and selling LPG cylinders confirmed that the cylinder user must pay the security deposit by delivering it to the licensee practising the activity of selling LPG cylinders, to the licensee practising the activity of filling LPG cylinders being the owner of the cylinder with identification.

The user may obtain a cylinder with identification after paying the security deposit and replace the cylinder he owned in exchange for obtaining the cylinder with identification without the payment of the security deposit. The security deposit refund shall be paid when returning the cylinder with an identification to the distributor without obtaining another. In the event of loss or misuse of the cylinder with an identification, the licensee has the right to confiscate the security deposit stipulated in the regulation.

The Ministry further clarified that the new gas regulations offer several benefits.

These include the following:

1. The Ministry of Commerce, Industry, and Investment Promotion is concerned with regulating and monitoring the activity, and the Ministry of Energy and Minerals is concerned with regulating the sale of cylinders.

2. Cylinder prices shall be determined in accordance with a decision issued by the Minister of Commerce after the approval of the Ministry of Finance.

3. Obligating the licensee (filling and selling gas cylinders) to replace the gas cylinder with identification with the cylinder made of iron within three years from the effective date of this decision(December 6, 2027).

4. The gas cylinder consumer must pay a security deposit for the first time (applicable in December 2024) and receive a receipt for receipt of the amount.

5. Gas cylinders must be replaced within a specific period of time (three years after the decision is implemented).

6. Receiving the cylinder purchase invoice.

Insurance amount for the ventilated cylinder:

The decision obligated the person consuming the cylinder to pay a one-time insurance amount to obtain it, which is determined according to the type, capacity and size of the cylinder. The user can replace the cylinder he owns in exchange for obtaining the cylinder with the ID without paying the insurance amount.

The consumer pays the amount to the person who sells the gas cylinder, and the seller delivers the amount to the person engaged in the filling activity in his capacity as the cylinder owner. The decision explained that it is possible to recover the insurance when the user returns the cylinder without obtaining another one. However, the insurance amount will be confiscated if the cylinder is lost or misused.

For filling and selling activities

The decision requires obtaining a licence to practice filling and selling liquefied petroleum gas cylinders.

The General Directorate of Industry at the Ministry of Commerce, Industry and Investment Promotion is responsible for following up on the licensee’s commitment to implementing the provisions of the regulation, controlling violations, and taking the necessary measures regarding them.

Procedures for obtaining a licence

A licence to practice filling LPG cylinders is issued according to market needs. The Ministry may reduce the quantity of LPG allocated to the licensee to fill LPG cylinders whenever the public interest requires it. Filling LPG cylinders (packages) and (containers) shall be practised through two separate licences in two independent locations. The licence period is for one year.

The licensee who is licensed to practice the activity of filling LPG cylinders must adhere to the following:

* Practising the licenced activity within the geographical scope of the governorate specified in the licence.

* Selling the cylinder to a licensed commercial facility (cylinder warehouse).

* Not to raise the selling price of the cylinder above its specified price.

Administrative penalties

The decision authorised the Ministry to impose one or more penalties, ranging from a written warning to an administrative fine not exceeding OMR1,000, suspension of the licence, and cancellation.

 

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