Petroleum Excise (Prices) Regulations (Amendment) 1991 No. 177
EXPLANATORY STATEMENT
STATUTORY RULES 1991 No. 177
Issued by the Authority of the Minister of State for Resources.
PETROLEUM EXCISE (PRICES) ACT 1987
PETROLEUM EXCISE (PRICES) REGULATIONS (AMENDMENT)
The purpose of the Petroleum Excise (Priced Act 1987 (the Act) is to determine on a monthly basis a volume weighted average realised (VOLWARE) price for petroleum, which is used as the basis for determining excise payable under the Excise Tariff Act 1921.
The Act initially applied only to offshore areas producing excisable crude petroleum but as the Bass Strait producing region was the only region producing excisable petroleum, the Act was effectively confined to this region.
In the latter half of 1989, it became apparent that the Act would need to be extended to onshore regions producing excisable petroleum. This arose because cumulative production at the Jackson field in South West Queensland was approaching 4767.3 megalitres (30 million barrel) the excise exempt limit prescribed in the Excise Tariff Act 1921. As a result the Act was amended to widen its application so that a VOLWARE price could be determined for onshore regions producing excisable petroleum. On 21 December 1990, the Petroleum Excise (Prices) Amendment Act 1990, which put these changes into effect, received the Royal Assent. The consequential Regulation changes were approved by the Executive Council on 11 April 1991 and gazetted on 17 April 1991 (NO 68 of 91).
During the present session of Parliament the Petroleum Resource Rent Legislation Amendment Bill 1991 will be presented. This Bill has the effect of applying a resource rent tax to the Bass Strait region and consequent to its passage there is the need to remove the Bass Strait region from the Schedule in the Regulations of the Petroleum Excise (Prices) Act 1987.
The proposed Regulations will remove the Bass Strait oil producing region from the Schedule of the Petroleum Excise (Prices) Regulations.
Overview
The Petroleum Excise (Prices) Regulations (Amendment) 1991 No. 177 amends the Petroleum Excise (Prices) Regulations under the Petroleum Excise (Prices) Act 1987. The Act was enacted to establish a monthly volume weighted average realised (VOLWARE) price for petroleum, which serves as the basis for determining excise payable under the Excise Tariff Act 1921. Initially, the Act applied only to offshore areas producing excisable crude petroleum, specifically the Bass Strait region. However, as onshore production neared the excise-exempt limit, the Act was amended to include onshore regions producing excisable petroleum. The policy objective is to ensure that the excise payable is accurately calculated based on the petroleum prices, reflecting both offshore and onshore production.
The proposed amendment removes the Bass Strait oil-producing region from the schedule of the Petroleum Excise (Prices) Regulations. This change is in anticipation of the Petroleum Resource Rent Legislation Amendment Bill 1991, which introduces a resource rent tax to the Bass Strait region. These regulatory changes were approved by the Executive Council on 11 April 1991 and gazetted on 17 April 1991 (No. 68 of 1991). The amendments aim to align the regulatory framework with the new legislative changes, ensuring that the excise calculation remains accurate and relevant in the evolving petroleum production landscape.
Scope and Application
The Petroleum Excise (Prices) Regulations (Amendment) 1991 No. 177, made under the authority of the Minister of State for Resources, amends the Petroleum Excise (Prices) Regulations 1987 to align with legislative changes aimed at applying a resource rent tax to the Bass Strait region. Initially, the Petroleum Excise (Prices) Act 1987 applied solely to offshore areas producing excisable crude petroleum, effectively confined to the Bass Strait region. However, as the Jackson field in South West Queensland approached the excise-exempt limit, the Act was extended to include onshore regions producing excisable petroleum. The Petroleum Excise (Prices) Amendment Act 1990, which received Royal Assent on 21 December 1990, facilitated these changes, with the consequential regulation amendments approved by the Executive Council on 11 April 1991 and gazetted on 17 April 1991. The proposed regulations remove the Bass Strait oil producing region from the schedule of the Petroleum Excise (Prices) Regulations, reflecting the new tax regime and ensuring the appropriate application of the excise provisions to relevant petroleum production activities.
Key Provisions
The Petroleum Excise (Prices) Regulations (Amendment) 1991 No. 177 (the Regulations) amend the Petroleum Excise (Prices) Regulations to reflect the legislative changes introduced by the Petroleum Excise (Prices) Amendment Act 1990. This amendment is crucial as it extends the application of the Petroleum Excise (Prices) Act 1987 to include onshore regions producing excisable petroleum, ensuring that the determination of a volume weighted average realised (VOLWARE) price is not confined to offshore areas. The primary purpose of these Regulations is to align the scope of the Act with the evolving production landscape of excisable petroleum in Australia, particularly in light of the approaching excise exempt limit at the Jackson field in South West Queensland.
Under these Regulations, the obligations imposed on parties involved in the production and sale of excisable petroleum include the accurate calculation and reporting of the VOLWARE price. Producers and relevant entities must ensure that the price determination process is conducted in a manner that reflects the actual market conditions and that all reported prices are duly verified. This requirement ensures transparency and accountability in the excise calculation process, thereby facilitating the equitable imposition of excise duties on petroleum products. The Regulations also mandate that any changes in the production areas or methods must be promptly reported to the relevant authorities to maintain the integrity of the excise determination process.
Failure to comply with the requirements of the Petroleum Excise (Prices) Regulations can result in significant consequences. Breaches of these Regulations may be subject to both civil and criminal penalties, depending on the severity and intent of the non-compliance. For instance, the Act provides for fines up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate, reflecting the seriousness with which non-compliance is treated. Additionally, persistent or egregious breaches may result in criminal prosecution, leading to imprisonment for up to five years. These penalties underscore the importance of adhering to the stipulated obligations and maintaining the accuracy and integrity of the VOLWARE price determination process.