Legislation
Legislative framework
As per government orders, the BT&P has supervising authority regarding price procedures (setting tariffs, tariff structures and tariff adjustments) that are to be used pertaining to bitumen 40/50.
This authority from the government is laid down in the Prices Ordinance 1961 (Official Gazette 1961, no. 117).
The regulatory framework of BT&P for bitumen is further specified in the Guideline Tariff Regulation Bitumen 40/50. This guideline pertains to both an advisory and an executive field of operation for the BT&P.
Prices Ordinance
The Prices Ordinance lays down the frameworks for the determination of the price for goods and services in general by the government, if developments give cause thereto. In addition, by order of the government, a Guideline Tariff Regulation Bitumen 40/50 has been issued, based on these adopted frameworks. This guideline provides BT&P with the possibilities to optimally and transparently perform the tasks which have been specifically assigned to it for bitumen by the government within the frameworks of the Prices Ordinance.
Download the Prices Ordinance 1961 Official Gazette 1961, no. 117*
* Note: This National Ordinance has not yet been adapted to the new constitutional structure effective as from 10 October 2010.
The tariff guideline
The Guideline Tariff Regulation Bitumen 40/50 exclusively pertains to the local bitumen market where Curoil operates as wholesaler and the BT&P operates as supervisor on behalf of the government. The roles and responsibilities of both parties are clearly described, as is the procedure to be followed in order to establish the bitumen tariff. The price adopted in accordance with the guideline does not refer to bitumen containing products that are exported abroad. In this respect, Curoil is free to determine a price for this. The following matters are regulated in the guideline:
- Which purchase price may be used when determining the sales price
- Which sales margins are permitted
- How to handle surpluses/deficits resulting from deviations between previously calculated costs and actual costs of Curoil as wholesaler
For the calculation of the tariff for bitumen, the following starting points are used in the guideline:
- The actual purchase prices on the purchasing invoice of the wholesaler form the basis of the sales price
- Verification of the purchase prices with the monthly purchasing data
- Verification of the purchasing invoice prices in the market to determine purchases were proper
- Evaluation of external effects of the tariff change and having same included in the resolution on the determination of the price if necessary
- Annual adjustment of the sales tariffs based on factors referred to earlier for the stability of the price of bitumen and of the price for locally sold asphalt concrete
Adopted price changes for bitumen are subsequently laid down in an annual Decree on Prices. The highest permitted price for bitumen is formally laid down there within. Since asphalt for a significant part consists of bitumen, the price changes for bitumen as a result of fluctuating purchase prices shall also affect the prices for asphalt.
The asphalt prices shall therefore also be regulated by the Ministry of Economic Development.
The calculation of the asphalt price, following bitumen tariff adjustments is performed by the Ministry of Economic Development.