Fuel distribution in Poland from the legal side – what is worth knowing?

Fuel distribution – basic legal information

The primary piece of legislation governing the distribution of liquid fuels is the Act of 10 April 1997 – the Energy Law. Firstly, it is necessary to establish what fuel trading actually entails under Polish law. The legal definition of this concept is contained in Article 3(6) of the aforementioned Act, which states that fuel trading is to be understood as the conduct of economic activity consisting of the wholesale or retail trade in fuel or energy. However, in order to carry out such activities, a fuel trading licence must be obtained. As Article 32(1)(4) of the Energy Law stipulates, a licence is required to carry out economic activities involving the trading of fuels or energy. A licence is required for the sale of products such as motor petrol, LPG or diesel (the full list of types of liquid fuels for which a licence is required for trading is set out in the Regulation of the Minister of State Assets of 27 November 2019 on the detailed list of liquid fuels for which the production, storage or transhipment, transmission or distribution, trade, including trade with foreign countries, requires a licence and the import of which requires entry in the register of importers).

What conditions must an entrepreneur meet to obtain a licence for the distribution of fuel in Poland?

The conditions that an entrepreneur intending to trade in liquid fuels must meet are set out in Article 33 of the Energy Law. In accordance with this provision, the applicant (entrepreneur) should:

• have their registered office or place of residence within the territory of the EU, a party to the Agreement on the European Economic Area, or Turkey;
• have financial resources sufficient to ensure the proper conduct of business, or be able to demonstrate the ability to obtain such resources;
• possess the technical capabilities to ensure the proper conduct of business;
• ensure the employment of persons with appropriate professional qualifications (this requirement is further specified in Article 54 of the Energy Law);
• obtain a decision on land-use and development conditions;
• have no outstanding tax liabilities constituting revenue for the state budget, except in cases where the applicant has obtained a legally prescribed exemption, deferral, instalment plan for tax arrears or tax, or a suspension of the full enforcement of a decision by the competent tax authority.

The Energy Law also contains a number of negative grounds, the existence of which precludes the possibility of obtaining a licence. Thus, pursuant to Article 33(3), a licence may not be granted to an entrepreneur:

• who is subject to bankruptcy or liquidation proceedings;
• whose licence for the activity specified by the Act has been revoked within the last 3 years for the reasons listed in Article 41(3) of the Energy Law, or who has been removed from the register of regulated activities within the last 3 years due to a decision prohibiting the applicant from carrying out the activity covered by the entry, on the grounds of:
  • submitting a declaration of compliance with the conditions required by law to carry out that activity which is inconsistent with the facts, or
  • failure to remedy breaches of the conditions required by law for the performance of that activity within the time limit set by the authority, or
  • a gross breach of the conditions required by law to carry out this activity;
• a person convicted by a final court judgment for a criminal offence or a fiscal offence related to the business activity carried out;
• who is not registered as a VAT payer;
• if another entity exercising significant influence over them or exercising control or joint control over them within the meaning of the Accounting Act has, within the last 3 years, been convicted by a final judgment of a criminal offence or a fiscal offence related to the business activity conducted;
• in the case of a licence to carry out business activities in the field of liquid fuels, if another entity exercising significant influence over it or exercising control or joint control over it within the meaning of the Accounting Act has, within the last 3 years, been convicted with final effect of a criminal offence or a fiscal offence relating to the business activities carried out.

Licence for fuel distribution – formal aspects

To obtain a licence, an entrepreneur meeting the eligibility criteria should submit an application to the President of the Energy Regulatory Office for a licence to trade in liquid fuels (this can be done at one of the Energy Regulatory Office’s regional branches). The content of the application, i.e. the essential elements it must contain, are set out in Article 35 of the Energy Law. The procedure for granting a licence is conducted in accordance with the provisions of the Code of Administrative Procedure. The licence is granted for a fixed term (the applicant specifies in the application the duration for which the licence is to be granted). Pursuant to Article 36 of the Energy Law, a licence for the trading of fuels may be granted for a period of not less than 10 years and not more than 50 years. Submitting the application also entails the payment of a fee, which, pursuant to Article 6(3) of the Stamp Duty Act, amounts to PLN 616.

It is also worth noting that conducting business activities involving the trading of fuels without a licence is punishable. Pursuant to Article 57g of the Energy Law, anyone who conducts business activities in the field of production, storage or transhipment, liquefaction, regasification, transmission or distribution, trading in liquid or gaseous fuels or energy, including the trading of liquid fuels with foreign countries, without the required licence, is liable to a fine of up to PLN 5,000,000 or imprisonment for a term of between 6 months and 5 years.

In conclusion, it should be noted that the distribution of fuels in Poland is subject to a licence, which an operator must obtain before commencing the sale (trade) of fuels. When applying for a licence, the entrepreneur is required to meet a number of positive criteria and should also ensure that none of the negative criteria apply, as these would prevent the licence from being granted. Conducting business without a licence is prohibited by law, and the penalty may amount to as much as PLN 5 million or imprisonment for up to 5 years.