Bill Tabled To Move Fuel Regulation To The RA

October 1, 2022 | 5 Comments

The ‘Fuels Bill 2022′ will move the “responsibility for the regulation of fuels under the auspices of the Regulatory Authority,” Deputy Premier & Minister of Home Affairs Walter Roban said in the House of Assembly.

The Minister said, “The Fuels Bill seeks to make the Regulatory Authority responsible for not only the regulation of the economic aspects of regulating the sector, but also proposes broader oversight, to tie in environmental, safety and health regulations under one main umbrella. The addition of fuels to the RA also provides synergy in determining the cost to the consumer, both in considering the fuels surcharge and fuel at the gas station. The RA will, as for the Submarine Communication cables sector, be the ‘one-stop shop’ for all matters of licensure.”

The Minister’s full statement follows below:

Mr. Speaker, today I am tabling the Bill entitled: the “Fuels Bill 2022”. This Bill is a watershed moment in the regulation of fuel in Bermuda, as first and foremost it moves the responsibility for the regulation of fuels under the auspices of the Regulatory Authority.

The Regulatory Authority, or ‘RA,’ was conceived of over a decade ago to be Bermuda’s multi-sector regulator, responsible for any networked industry deemed appropriate to be regulated. Mr. Speaker, because of the strength and capacity the RA has built in regulating the vast sectors of electronic communications, electricity, and more recently, submarine communications cables, the time is right for adding the fuels sector to the RA’s portfolio. It is, therefore, critical to the understanding of this Bill to consider its provisions in conjunction with the Regulatory Authority Act 2011, which sets the ‘rules of engagement’ between the regulator and any regulated industry under its purview. This bill defines those things that are unique, specific, and critical to the fuels sector.

Mr. Speaker, the Fuels Bill seeks to make the Regulatory Authority responsible for not only the regulation of the economic aspects of regulating the sector, but also proposes broader oversight, to tie in environmental, safety and health regulations under one main umbrella. The addition of fuels to the RA also provides synergy in determining the cost to the consumer, both in considering the fuels surcharge and fuel at the gas station. The RA will, as for the Submarine Communication cables sector, be the ‘one-stop shop’ for all matters of licensure.

The Bill defines to whom the legislation will apply, and the key terms of the industry. It is important here to make the distinction that this Bill applies only to those who sell fuel to others as their primary business. This means, Mr. Speaker, in broad terms, that the Bill will apply to those entities that import fuel for the purpose of selling it in turn to others, and to those in the primary business of selling fuel in the context of gases for cooking and heating, or fuels for vehicles.

Mr. Speaker, at a high level, the purposes of the proposed Fuels Bill are:

  • To ensure that Bermuda has an appropriate and adequate fuel supply to meet its needs;
  • To ensure safe, efficient, economic and environmentally responsible operation of the fuel sector;
  • To ensure the continuity of service, in ensuring the continued good management and maintenance of critical infrastructure, like pipelines and storage tanks, for example;
  • To protect the interests of consumers by ensuring fuel pricing is fair and transparent;
  • To promote competition where appropriate and feasible; and
  • To promote investment in the sector that is beneficial to the economy, the people, and the environment of Bermuda.

The Fuels Bill also sets out the functions of the Regulatory Authority and the Minister, setting the boundaries of responsibilities to ensure that all regulatory activities are conducted with transparency and fairness to all participants, while enabling the Minister to set policy and priorities.

With regulation will come licenses, for the actual business in the local fuels market. To be clear, Mr. Speaker, this is not to be construed as any transfer of responsibilities for matters of fire safety, planning, or environmental health. Those agencies will continue to hold responsibilities for the areas they do at present, and the new licenses will require compliance with all the relevant Acts as before, but in this new setting, the ability to conduct business will be necessarily and inextricably linked to those compliances. This Bill provides an additional layer of protection and a centralization of service for any new participants in the sector. To be clear, as the matter of ‘competition’ is being considered in the context of this new Bill, there is no intent to lifting the existing moratorium on filling stations. ‘Competition’ may come in several forms, including the possibility of the introduction of new fuels to Bermuda, like biofuels or hydrogen as those technologies continue to develop.

Mr. Speaker, lastly, but by no means least, are the provisions for offences and penalties, which are envisioned to be sufficiently strict so as to give additional teeth to existing safety and environmental legislation.

For the avoidance of doubt, this Bill represents the beginning of our harder work, as it is the framework on which the regulations will be built. The regulations, under design at the moment, will provide for the details the applications for fuel licenses, including different types of fuel and different classes of operator. It is envisioned that the regulations will not be prescriptive but allow for entrants with new and different products to participate in the local market. Those fuels might include biodiesel, or even hydrogen as that technology becomes increasingly more feasible. Regulations will also include actions and conditions to the licensees, including public information and measures to ensure transparency while preserving proprietary information.

Mr. Speaker, like many similarly sized and situated jurisdictions, Bermuda’s fuel sector has multiple single points of failure, in which if any one of those elements of critical infrastructure were to be disturbed or taken out of service for any reason, the entire country would be very adversely affected. regulations will also define those elements of critical infrastructure and prescribe rules to govern and ultimately protect them, thus providing another layer of reliability and accountability for those components.

Mr. Speaker, service to the people of Bermuda is the single greatest purpose of this Bill. Protecting consumer interests with fairness and transparency in all aspects of regulation is paramount to the ultimate efficacy of the legislation, and therefore will be addressed in greater detail not just in regulations, but also through the processes of the RA, in General Determinations. Among the most important aspects of the regulations and indeed of the regulatory process is its inclusion of and consultation with industry. Regulations will not be derived in a vacuum, but rather in fulsome discussion and conversation with industry, including not only the main importers, but the filling stations and operators as well.

Mr. Speaker, I must add clarity and assurance in the matter of pricing in particular. Just as with the other regulated industries under the auspices of the Regulatory Authority at present, pricing methodologies will be developed through the General Determination process of the Regulatory Authority, which is required by law, in accordance with the Regulatory Authority Act of 2011, to be inclusive, consultative, iterative, and transparent. The public, the paying customers, deserve no less, and this Bill seeks to ensure these good practices are carried through the Fuels sector for the benefit of all.

Mr. Speaker, Regulations will also ensure that transitional matters are addressed, so that operators and sectoral participants currently in the market will be allowed to continue their business with confidence and certainty, with a commitment to regularizing their licensing and ensuring that their operations go forward under the new regulatory regime, without interruption or disruption. With all of this change will also come preparation, and so the RA will have some work to do before it is able to assume the reins of the fuels sector, and the regulations will ensure that the transition is sensible and as smooth as possible.

Mr. Speaker, in closing, this legislation promotes and strengthens our sustainable goals. The Fuels Bill, once passed, will protect the people of Bermuda in ensuring fairness and transparency. It will ensure that the interests of sectoral participants are protected, by providing rules and guidelines for the RA and the Government. Bermuda’s environment will be protected, by ensuring that related offenses are met with appropriate, proportional and serious penalties. Ultimately, the economy will be promoted, by ensuring that there is regulatory certainty for all investors, both new and existing, in the fuels sector. This Bill will uphold the pillars of sustainability and contribute to Bermuda’s continued growth and prosperity.

Thank you, Mr. Speaker.

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Comments (5)

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  1. No More says:

    expect the dictatorship token finding more and more ways to have this REGULATORY authority keep free enterprise in check at a cost. I would expect to see an RA charge incorporated in our fuel purchases as per on our Belco bill. For what???

  2. Observer says:

    The same RA which has done nothing to BELCO who has been selling power generated by those with Solar systems to other customers, charging them a fuel adjustment fee but refusing to give that fee back to the supplier.
    Way to go.
    Can we trust them to do the right thing by the consumer?

    • sandgrownan says:

      Of course it was the RA that are responsible for the mess on roofs in Pembroke.

  3. Jussayin says:

    The RA approves everything, the companies know how to work through the approval process. Once they check all the boxes RA approves and the ppl get fu@#%d (just look at the banking industry)

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