Oversight Article 21

In the event of an oil shortage or a great fluctuation of oil prices that might impact the steady supply of oil or national security, the central competent authority may institute measures on oil control, such as quotas, price controls, and adjustments. Furthermore, it may utilize the security stockpile during an emergency period.

To clarify these measures, the central competent authority will draft a bill on oil control in emergency periods delineating the enforcement conditions, timing, procedures, applicable targets, scope, contents, and methods. The bill will then be submitted to the Executive Yuan (Office of Administration) for final approval.

Article

22

Oil refinery businesses, oil import businesses, oil export businesses, gasoline and diesel oil wholesalers, gasoline stations, LPG stations, fishing boat filling stations, air terminal oil storage and refilling facilities, commercial ports, and industrial ports, as well as oil and LPG filling facilities installed for private use that meet the criteria set by the central competent authority are required to obtain public liability insurance coverage and accidental contamination liability insurance.

The central competent authority will decide how much coverage each business must obtain after conferring with the Ministry of Finance.

Article 23

Oil businesses are liable for damages to others caused by its production methods, import/export, sales, transport or storage of the oil product, or other business-related activities.

Article

24

Oil refinery operators and importers are required to maintain a security stockpile of no less than sixty days of supply. The supply amount will be based on the average domestic sales and consumption in the past twelve months. The security stockpile of LPG may amount to no less than twenty-five days of supply. The supply amount will be based on the average domestic sales and consumption in the past twelve months.

The aforesaid security stockpile must be no less than 50,000 kiloliters or 10,000 kiloliters for importers of only LPG.

The government should make use of the Petroleum Fund (see Chapter 6 herein) to store crude oil. The amount stored in the third year following the enactment of this Law must not be lower than thirty days of demand. The demand amount will be based on the average domestic sales and consumption of the previous year.

The criteria and computation formulas for the actual security stockpiles referred to in the first and the third paragraphs will be determined and promulgated by the central competent authority.

Article 25

Where different oil refinery operators or importers share the same oil storage facility for their security stockpile, they must file jointly with the central competent authority before the 20th of each month indicating the amount each of them stores in the said facility. If the actual joint storage volume is lower than the total of that reported by the individual businesses, each individual business will be deemed to have failed to meet its safety stock requirement unless evidence proves which business actually has stored less than their required security stockpile amount.

Article 26

If an oil refinery operator or importer ceases operation, the central competent authority may draw on the Petroleum Fund (see Chapter 6 herein) to purchase their security stockpile. In any case, the security stockpile of this company may not be disposed of without the prior consent of the central competent authority.

Article 27

Before the end of October of each year, oil refinery operators must prepare and file with the central competent authority an annual production, import, export, and sales plan for the following year. Furthermore, before the 20th of each month they must file a report on the production, import, export, and sales of the previous month as well as a report on the status of their security stockpile for the current month.

The preceding provision also applies to oil importers, exporters, and gasoline/ diesel oil wholesalers.

Article 28

The central competent authority may ask the oil refinery operators, importers, exporters, and gasoline/diesel oil wholesalers to report on their operations. Or, the central competent authority may send personnel or have a professional institution conduct an inspection of the actual operations, security stockpile, and relevant data of these businesses. The business may not interfere with, refuse, or dodge such inspection.

The central competent authority may ask the manufacturers of petrochemical materials to report on their use of imported petroleum products. Or, the central competent authority may ask oil or non-oil businesses to name who bought the solvent oil and/or lubricant products the businesses imported. Likewise, the central competent authority may send personnel or appoint a professional institution to conduct an inspection on the same issues. The business may not interfere with, refuse, or dodge such inspection.

Competent authorities of different levels may ask gasoline, diesel oil, and LPG suppliers or their customers to name who bought their products. They may also send personnel or appoint a professional institution to conduct an inspection on the same issues. The

business may not interfere with, refuse, or dodge such an inspection.

Article 29

Only petroleum products that meet the national standards, where such standards apply, can be imported or sold in the domestic markets.

The central competent authority may send personnel or appoint a professional institution to examine the quality of the petroleum products sold. The business may not interfere, refuse, or dodge such examination.

Article

30

If the central competent authority revokes the license of an oil refinery operator, importer, exporter, or gasoline/diesel oil wholesaler, that business is prohibited from re-applying for another operation license or registration certificate within two years from the date of revocation.

If the operation license of the operators of a gasoline station, a LPG station, or a fishing boat filling station has been revoked, the original business body and its responsible person are prohibited from reapplying to setup a filling station at the original site within two years from the date of revocation.

If the installation permit of an oil/LPG filling or storage facility for private use has been revoked, the original site may not be used again for such a facility within two years from the date of revocation.

Article

31

Where necessary, oil refinery operators or importers may lay pipelines using rivers, irrigation canals and ditches, coastal areas, bridges, dikes, ports and harbors, roads, forest land, green land, parks, and other public land.

Laying the pipeline may not disrupt the landscape or the original use of the premises on which the pipeline is laid. Before laying the pipeline, those who will do so, must get the approval of the central competent authority and the agency in charge of the land. The operator or importer must compensate for any damages incurred to the landscape or to the original use of the premises on which the pipeline is laid.

Oil refinery operators or importers who have oil pipelines may accept the request of other businesses to transmit oil through those pipelines.

Article 32

Oil refinery operators or importers must observe the following requirements in laying oil pipelines:

1. The materials of the pipeline must conform to national standards or other comparable standards.

2. The business must immediately replace corroded pipelines that pose a safety concern.

3. The business must conduct periodic inspections of its oil pipelines each year and save the inspection results for the competent authorities to review.

4. The competent authorities may send personnel or appoint a professional institution to conduct inspections of the pipelines. The business may not refuse such inspection.

5. The business must draw up a pipeline maintenance, inspection, replacement, anti-burglary, anti-leaking, and contingency plans for the following year before the end of October of each year. Before the end of January of each year, it must also produce a report on the inspection and replacement status of the pipeline for the previous year. This report must then be filed with the competent authorities.

6. The business must submit its oil pipeline layout diagrams, final acceptance drawings, and other relevant data to the competent

authorities for the setup of a pipeline management information system.

If the inspection of the pipeline shows that corrosion of pipes poses a safety concern, the competent authorities may demand remedial actions from the business within a prescribed time period.

Article 33

Oil businesses must apply to the competent authority of the special municipal or county (city) government for permission to install oil storage facilities. The central competent authority will prescribe the rules governing the application procedures, land uses, and other administrative matters.

An oil business may ask an inspection institution sanctioned by the central competent authority to conduct periodic or occasional inspections of the aforesaid oil storage facilities and to prepare inspection records. The central competent authority may dispatch personnel or appoint an institution to conduct spot checks of said storage facilities.

An oil business must retain the aforesaid inspection records for at least five years. If deemed necessary, the local competent authority of the municipal or county (city) government may dispatch personnel to check those inspection records.

The central competent authority will stipulate the eligibility, requirements, fee schedule, and responsibilities of the inspection institution referred to in the second paragraph of this Article.