Change in Liability Mechanisms at Gas and Fuel Stations

The Economic Affairs Committee of the National Assembly has given a positive conclusion regarding amendments to the Code of Administrative Offenses and the draft to amend the Law on Trade and Services. The changes relate to inspections at gas and fuel stations and modifications to liability mechanisms.

“Currently, the fine arising from undercharging is a fixed amount of 500,000 drams. According to the proposal, it is suggested to set the fines at a fixed 200,000 drams, plus 0.5 percent of the turnover from the previous quarter before the penalty is imposed,” said co-author of the law, Tzovinar Vardanyan.

The justification for the proposal states that the need for change in the Code of Administrative Offenses has arisen due to the fact that the existing articles of this code do not adequately regulate the legal relationships between consumers of liquefied gas, natural gas, gasoline, and diesel fuel, and suppliers of these types of fuel. Specifically, they entail disproportionate regulations considering the differences in turnover volumes of businesses and the extent of damage caused to consumers if measurement instruments are not ensured or if metrological norms are violated.

Furthermore, according to the mechanisms in Article 9, part 17 of the Law on Trade and Services, the protection of consumer rights is not carried out at the necessary level, as consumers using liquefied gas, gasoline, natural gas, and diesel fuel stations lack the tools for public oversight and do not have the opportunity to access information regarding the previous activities of the stations.

Thus, the existing regulations in this sector do not provide complete public oversight. There is a necessity to transition to a more equitable distribution system for penalties, where it is proposed to impose fines on the address or addresses of the organization that committed the violation. The severity of a violation would be determined by 200 times the minimum wage and 0.5% of the turnover from the previous quarter for the address where the violation was recorded.

Amendments are also required in the Law on Trade and Services, whereby in cases of undercharging identified by the inspection body responsible for ensuring measurement uniformity, a notice is to be posted stating “We have been fined for undercharging” for one month.

Additionally, with the proposed legislation, businesses will be obligated to have QR codes containing information about the dates and results of previous inspections conducted in the field of metrology. “A very important aspect is the additional sanction we currently apply, posting a sign, which, in my opinion, is more of a deterrent and a stricter penalty than the actual amount of the fine. This will motivate businesses more to avoid violations. This is a tool for public oversight. I believe that for companies, their reputation is much more valuable than the fine they will pay,” said co-author of the law, Babken Tunyan.