PETROLEUM RESOURCE RENT TAX ASSESSMENT REGULATIONS 2005 (REPEALED)

PART 4 - THE SUBSTITUTE PRICES  

REGULATION 19   THE COMPARABLE UNCONTROLLED PRICE  

19(1)    
A comparable uncontrolled price , or CUP , in relation to a relevant transaction for a volume or mass of project sales gas, is a price for sales gas:


(a) that was obtained for a sale in a market that the Commissioner is satisfied is a relevant market in relation to the transaction; and


(b) that the Commissioner is satisfied is an observable arm ' s length price.


19(1A)    
A comparable uncontrolled price , or CUP , in relation to a sale of a volume or mass of project natural gas to which paragraph 24(1)(f) of the Act applies, is a price for natural gas:


(a) that was obtained for a sale in a market that the Commissioner is satisfied is a relevant market in relation to the transaction; and


(b) that the Commissioner is satisfied is an observable arm ' s length price.


19(2)    
In determining whether a market is relevant, the demand and supply characteristics of the market must be taken into account, including:


(a) the composition of sales gas or natural gas sold in the market; and


(b) geographic differences between the production facilities and the product delivery point of the sales gas or natural gas sold in the market; and


(c) the end use for the sales gas or natural gas sold in the market.

Example:

Retail, wholesale, manufacturing, feedstock, domestic.


19(3)    
In determining whether a market is relevant, the following factors must also be taken into account:


(a) the terms of contracts usual in the market, including volumes, discounts, exchange exposures and other relevant conditions that would reasonably be considered to affect the price;


(b) market strategies;


(c) the existence of spot sales (including market penetration sales) below or above marginal cost;


(d) processing costs;


(e) technology used in processing;


(f) any other factors that it would be reasonable to consider.

19(4)    
In this regulation:

relevant transaction
, for a volume or mass of project sales gas, means:


(a) a sale of the gas to which paragraph 24(1)(d) of the Act applies; or


(b) an act by which the gas becomes an excluded commodity to which paragraph 24(1)(e) of the Act applies.



 

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