OIL CUSTODY TRANSFER MEASUREMENT

The legal framework in The Netherlands

Like many countries, The Netherlands has a so-called Metrology Act. Besides health, safety and environmental considerations, fairness in trade and taxation are the main drivers for having legal metrological control on measurements. When it comes to oils, oil-products and derivatives thereof, the simplified rule is “whenever a measurement plays a role in the determination of the height of an invoice, the levying of taxes or other forms of billing, legal metrological control applies”. Typical examples include trading quantities of oil, renting out storage space by the amount of liquid (Terminals) and pipeline transportation billed by transported quantity.

In The Netherlands, this applies to all types of liquids and all types of transactions. In other words, there is no exception for inter-company transactions, nor specific constriction to for instance the consumer market.

Please note that the Dutch Metrology Act applies to Liquids other than Water, whereas this document uses the terms “oil” and ”fluid” instead……………

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