In this Law, the following words and phrases shall have the meanings assigned thereto, unless the context requires otherwise:
Law: Law of Energy Supplies.
Regulations: Implementing Regulations of this Law.
Allocation Regulations: Energy Allocation Regulations.
Ministry: Ministry of Energy.
Minister: Minister of Energy.
Energy: All energy products, including crude oil and its derivatives, natural gas and its liquids, hydrogen, and electrical energy from various sources.
Energy Allocation: Determining the type and amount of energy made available to the consumer.
Energy Allocation Document: A document issued for the allocation of energy which includes the consumer's obligations as well as the terms and conditions to be observed.
Natural Gas and its Liquids: One or more of the following hydrocarbons: dry gas (sales gas), ethane, propane, butane, pentane and heavier hydrocarbons, and natural gasoline, and any other products from gas plants and from fractionation and sorting plants, such as sulfur.
Consumer: A natural or legal person in the Kingdom who obtains one or more energy products.
License: A written authorization issued by the Ministry to engage in one or more of the activities subject to Article 5 of this Law.
Licensee: A license holder.

This Law aims to:
1. regulate the allocation of energy to its consumers in the fields of electricity production, crude oil refining, petrochemical production, water desalination, industry, mining, agriculture, construction, communications, transportation, logistic services, and other fields; and
2. regulate the licensing of activities relating to natural gas and its liquids as well as activities relating to hydrogen.

• 1- A committee named (Energy Allocation Committee) shall be formed, chaired by the Minister, with members whose rank is not less than (fifteenth) or its equivalent from the following ministries: (Industry and Mineral Resources, Finance, Communications and Information Technology, Transport and Logistics Services, Economy and Planning, Environment, Water and Agriculture, Investment, Human Resources and Social Development), the Water and Electricity Regulatory Authority, the Local Content and Government Procurement Authority, the Expenditure and Projects Efficiency Authority, the Saudi Energy Efficiency Center, the National Committee for the Clean Development Mechanism, and the Petroleum Demand Sustainability Program. The chair of the committee may, as needed, add other members from governmental or other entities, and may delegate any member he sees fit to preside over meetings in his absence.

• 2- The Ministry shall undertake the secretariat work of the (Energy Allocation Committee) and provide the necessary administrative and financial support to ensure it achieves its objectives.

• 3- The committee specified in paragraph (1) of this article shall undertake the following:

  • A- Prepare the allocation regulation and propose amendments to it.

  • B- Approve the energy allocation criteria proposed by the Ministry to achieve optimal energy uses, contribute to enhancing the national economy and its diversification, achieve the targets of the energy mix, improve energy efficiency levels, promote the circular carbon economy, and manage greenhouse gases, in a manner that does not conflict with the strategies approved by the Supreme Committee for Hydrocarbon Affairs and the Supreme Committee for the Energy Mix for Electricity Production and enabling the renewable energy sector.

  • C- Review the energy allocation criteria every (three) years or as needed based on a decision from the chair of the committee.

  • D- Improve the process of collecting and exchanging data and information related to energy allocation.

  • E- Provide the Supreme Committee for Hydrocarbon Affairs with the following:

    • 1- Periodic reports on its achievements, challenges faced, and proposed solutions to address them.

    • 2- Any information, document, or statement it requires to enable it to monitor the performance indicators of the energy sector and achieve its targets.

• 4- The committee specified in paragraph (1) of this article shall establish its rules of procedure and voting mechanisms for decisions, provided that such decisions are issued by a majority of the votes of the attending members at least. In the event of a tie, the side that the chair of the meeting voted for shall prevail.

The Ministry shall allocate energy to the consumer based on available energy and the criteria approved by the Committee referred to in Article 3(1) of this Law, and shall accordingly issue the energy allocation document.

1. Without prejudice to the provisions of licenses issued under other laws to engage in one energy activity or more, obtaining a license from the Ministry shall be required prior to engaging in activities relating to natural gas and its liquids or activities relating to hydrogen. Such activities shall include transportation, processing, fractionation, gas purification, assembly, storage, local distribution, import and export, sale, and construction, ownership, and operation of networks and facilities of natural gas and its liquids or hydrogen facilities, in accordance with the Regulations.
2. The Regulations shall determine the fees for licenses.
3. The licensee shall obtain an insurance policy that covers his civil liability for any damage resulting from his management, as determined by the Regulations.
4. Ownership of tangible assets shall, upon expiration of the license, devolve to the State, unless the license stipulates otherwise or the Ministry decides to relinquish such assets upon agreement with the Ministry of Finance. The licensee shall deliver such assets to the Ministry in proper condition, except for normal wear and tear. Tangible assets mentioned in this paragraph shall refer to networks, pipelines, and plants designated for transportation, fractionation, processing, purification, assembly, storage, distribution, import and export, and sale of natural gas and its liquids as well as the networks and facilities for the production and distribution of hydrogen, and any fixed assets related thereto that are required by operations.

The energy allocation document must be obtained from the Ministry prior to the supervising agency’s approval to engage in one or more activities that require energy allocation in accordance with the provisions of this Law.

A license or energy allocation document may not be assigned to a third party without the approval of the Ministry.

1. Without prejudice to any harsher penalty stipulated in any other law, a person who violates any of the provisions of this Law, its Regulations, the Allocation Regulations, or the licenses shall be subject to one or more of the following penalties:
a) A fine not exceeding twenty million riyals.
b) Suspension of the license, wholly or partially, for a period not exceeding one year.
c) Cancelation of the license.
2. Without prejudice to any harsher penalty stipulated in any other law, a person who violates any of the provisions of the energy allocation document shall be subject to one or more of the following penalties:
a) Reduction of energy allocations.
b) Non-renewal or cancelation of the energy allocation document.
c) A fine not exceeding twenty million riyals.

1. A committee, or more, comprising at least three members shall be formed pursuant to a decision by the Minister. The formation decision shall designate the committee's chairman and his deputy and shall designate one or more substitute members. The committee shall be reconstituted every three years and membership thereof may be renewed. The committee's work rules and procedures as well as the remuneration of its members and secretariat shall be determined pursuant to a decision issued by the Minister.
2. The committee shall consider violations of the provisions of this Law, its Regulations, the Allocation Regulations, and the licenses as well as violations of the energy allocation document, and shall impose the prescribed penalties.
3. Committee members shall include at least one member who is expert or qualified in the activities subject to this Law and one member who is qualified in law or Sharia.
4. Committee decisions shall be passed by majority vote and shall be reasoned. Such decisions may be appealed before the competent court within 60 days from the date on which the concerned person is notified of the decision.

1. Inspectors, designated pursuant to a decision by the Minister, shall detect and record violations of the provisions of this Law, its Regulations, the Allocation Regulations, and the licenses as well as violations of the terms and conditions of the energy allocation document.
2. The Minister shall issue controls for detecting and recording as well as verifying and establishing violations of the provisions of this Law, its Regulations, the Allocation Regulations, the licenses, and the energy allocation document.
3. The Minister may outsource certain tasks relating to inspection and the detection and recording of violations, in accordance with the controls and standards specified in the Regulations and the Allocation Regulations.