Italy's legislation on oil security

The provisions of the DMS are triggered by a major supply disruption (article 20(1) DMS). A major supply disruption exists when there is a ‘substantial and sudden drop’ in the ‘supply of crude oil or petroleum products to the European Union (EU) or to a Member State, irrespective of whether or not it has led to an effective international decision to release stocks’ (article 2(1)(G) DMS). An ‘effective international decision’ is a decision by the International Energy Agency (IEA)’s Governing Board to release emergency stocks (article 2(1)(E) DMS).

Further, emergency measures may be taken to address a local crisis (article 20(5) DMS).

General

The addressees of the Italian stockholding obligation are both commercial entities and the Italian Central Stockholding Entity (CSE).

Article 3(7) DMS specifies that emergency oil stocks must be created and maintained by commercial actors who have in the previous year released for consumption petrol, diesel oil, fuel oil and kerosene type jet fuel and other specified fuel products. Article 7 DMS identifies the parameters governing the holding of emergency stocks by the Italian CSE.

Going beyond the identification of the parameters governing the Italian stockholding regime, the Italian DMS also stipulates that the Minister of Economic Development shall actively participate in the relevant meetings of the European Commission and the International Energy Agency to ensure Italy’s optimal preparation for an oil emergency (article 17(1) DMS).

Storage Agency

The Italian CSE is the Organismo Centrale di Stoccaggio Italiano (OCSIT) (article 7(1) DMS). OCSIT is tasked with acquiring, maintaining, selling and transporting emergency stocks (article 7(2) DMS). OCSIT must also prepare and regularly update oil supply emergency plans (article 7(9) DMS).

Storage Quantity

According to article 3(3) DMS, the overall volume of Italian emergency stocks should correspond to the greater of the 90 day average imports or 61 days of domestic consumption in the previous year.

Availability of stocks

According to article 5(1) DMS, emergency stocks must be stored both by commercial stockholders and by OCSIT in such a manner that they can be released and delivered effectively to end users ‘within the time frames and conditions conducive to alleviating the supply problems’ (see also article 2(1)(O) DMS).

Furthermore, article 5(4) DMS specifies that emergency oil stocks may not be attached or seized and it is prohibited to hinder the release or transfer of emergency stocks in any way (article 5(7) DMS).

Storage Locations

According to article 5(2) DMS addressees are obliged to notify the Ministry of Economic Development and OCSIT of the exact location of emergency stocks. However, Italian primary legislation makes no provision for specific locations of emergency stocks except to the extent that OCIST, when preparing contingency plans, shall take into account the current location of emergency stocks and the locations of high demand for fuel products in emergency situations (article 7(10) DMS).

Sale of excess stocks

N/A

Italy’s emergency regime is monitored and enforced on the domestic, regional and international level. Each will be considered in turn.

Domestic

Reporting duties

According to article 3(8) DMS, the addressees of the Italian stockholding obligation are obliged to provide the Ministry of Economic Development with information concerning the volume of their sales in the previous year. They must also submit information on a monthly basis concerning statistics on the production, import, export and distribution of oil products (article 11(1) DMS). The Ministry and OCSIT are in turn obliged to keep a register of the quantity, location and composition of emergency stocks (article 6(1) DMS). A summary of the information held by the Ministry and OCSIT is then forwarded to the European Commission on an annual basis (article 6(3) DMS, see also article 12 DMS).

Enforcement

The provisions of the DMS are enforced by the Ministry of Economic Development (article 11(4) DMS). Violations of the DMS’s reporting obligations may attract fines that, depending on the gravity of the violation, from EUR 2 000 to EUR 5 000 (article 11(3) DMS) or EUR 10 000 to EUR 25 000 (article 24(2) DMS). When enforcing the DMS, the Italian Ministry of Economic Development may enlist the assistance of the Italian custom and revenue authorities (articles 18(8-9) DMS).

Violations of DMS provisions relating to the storage of emergency stocks attract fines of EUR 6.50 per tonne of non-stored emergency product (article 24(1) DMS).

The DMS also explicitly allows for the possibility that European Commission officials may carry out inspections to test the level of Italian emergency preparedness (article 18(2) DMS).

Regional

European Union

As a Member State of the European Union, Council Directive 2009/119/EC obliges Italy to maintain a minimum volume of emergency oil stocks corresponding to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. The Directive also imposes strict requirements concerning the composition and location of the emergency oil stocks, so as to guarantee their availability and accessibility in case of need, among other provisions.

Italy’s compliance with the provisions of the directive is monitored and enforced by the European Commission. If a Member State is deemed not to be compliant with the EU Directive, the Commission might decide to initiate an infringement procedure, which might ultimately lead to refer the case to the Court of Justice of the European Union (articles 258-259, Treaty on the Functioning of the European Union).

International

The IEA

As a Member of the IEA, Italy is obliged, pursuant to article 2 of the International Energy Programme (IEP), to maintain oil reserves equal to 90 days of net imports of the previous year. IEA Members are obliged to submit information concerning their emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP.