SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriquez, Jr.

House Bill No. 3475

EXPLANATORY NOTE

Republic Act (RA) No. 8479, otherwise known as the “Downstream Oil Deregulation
Act of 1998,” was enacted in order to foster a truly competitive market and adequate supply
of environmentally-clean and high quality petroleum products.

However, the purposes for which the law was passed have not been realized. On the
contrary, it has only strengthened the oil cartel in the country. The promise of competition by
the entry of new oil players had not been accomplished inasmuch as the new oil players get
their oll supply from the dominant oil companies which dictate the prices of oll. The high
price of oil adds misery to the people as it translates to lesser purchasing power on the part
of consumers. Hence, this bill to regulate the oll industry and re-establish the Oil Price
Stabilization Fund (OPSF).

By repealing RA 8479, the oil industry will then be again regulated by the
government. On the other hand, the revival of the OPSF will cushion the additional costs of
importation of crude oil and petroleum products due to fluctuations in foreign exchange
rates, addressing the sad plight of the consumers, the transportation industry and the nation
asa whole.

Premises considered, early approval of this bill is earnestly sought.

RUFUS B. ie
ee ee JR.


SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES }
First Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 3475

AN ACT
REGULATING THE OIL INDUSTRY, ESTABLISHING THE OIL PRICE STABLIZATION
FUND (OPSF) FOR THE PURPOSE AND REPEALING REPUBLIC ACT NO. 8479, “THE
DOWNSTREAM OIL INDUSTRY DEREGULATION ACT OF 1998”

Be it enacted by the Senate and House Representatives of the Philippines in Congress
assembled:

SECTION 1. Short Title. - This Act shall be known as "The Oil Industry Regulation Act of
2013".

SEC. 2. Declaration of Policy. - Itis hereby declared the policy of the State to regulate the
oll industry. As such, the State shall create a mechanism to stabilize the prices of petroleum
products

SEC. 3. Definition of Terms. ~ For purposes of this Act:
(a) ‘Commission’ refers to the Energy Regulatory Commission;

(b) “Crude Oi!’ refers to oil in its natural state before the same has been refined or
otherwise treated, but excluding water, bottoms, sediments and foreign
substances;

(c) “Dealer” refers to any person, whether natural or juridical, engaged in the
marketing and direct selling of petroleum products to motorists, end users, and
other consumers;

(a) "DOE" refers to the Department of Energy;

(e) “Person” refers to any person, whether natural or juridical, who is engaged in
any activity of the oil industry;

(f) “Petroleum” refers to the naturally occurring mixture of compounds of hydrogen
and carbon with a small proportion of Impurities and includes any mineral oil,
petroleum gas, hydrogen gas, bitumen, asphalt, mineral wax, and all other similar
or naturally-associated substances, with the exception of coal, peat, bituminous
shale or other stratified mineral fuel deposits; and

(9) “Petroleum Products” refer to the products formed in the course of refining
crude petroleum through distillation, cracking, solvent refining and chemical
treatment coming out a as primary stocks from the refinery such as but not limited
to: LPG, naphtha, gasoline, solvent, kerosene, aviation fuels, diesel oils, fuel oils,
waxes and petroleum, asphalt, bitumen, coke and refinery sludge, or such
refinery petroleum fractions which have not undergone any process or treatment


as to produce separate chemically-defined compounds in a pure or commercially
pure state and to which various substances may have been added to render
them suitable for particular uses: Provided, That the resultant product contains
not less than fifty percent (50%) by weight of such petroleum products

SEC. 4. Oif Price Stabilization Fund. - There is hereby created an Oil Price Stabilization
Fund (OPSF), hereinafter referred to as the Fund, which shall be used to reimburse the oil
companies for cost increases on crude oil and imported petroleum products resulting from
exchange rate adjustment or increases in world market prices of crude oil,

SEC. 5. Sources of Fund. - The Fund, to be administered by the Secretary of Energy, shall

be sourced from any of the following:
(a) Fifteen percent (15%) from the excise tax on petroleum products as defined and
enumerated in Section 148 of Republic Act No. 8424, otherwise known as the “Tax
Reform Act of 1997," as amended;
(b) Fifteen percent (1%) from the excise tax on automobiles as provided in Sec.
149 of Republic Act No. 8424, otherwise known as the “Tax Reform Act of 1997,” as
amended;
(c) Any increase in tax collection from excise tax or customs duty imposed on
petroleum produces subject to tax arising from exchange rate adjustment, as may be
determined by the Secretary of Finance in consultation with the Commission:
(d) Any additional tax to be imposed on petroleum products to augment the
resources of the Fund through an appropriate order that may be issued by the
Commission requiring payment by persons or companies as dealers or otherwise;
(e) Any increase in the tax collection as a result of the lifting of tax exemptions of
government; and
(f) Any resulting cost differentials in case the actual peso costs paid by oil
companies in the importation of crude oil and petroleum products is less than the
peso costs computed using the reference foreign exchange rate as fixed by the
Commission.

SEC. 6, Rules and Regulations. ~ The Secretary of Finance shall, in consultation with the
Secretary of Energy, promulgate the necessary rules and regulations to implement this Act.

SEC. 7. Appropriation. - The amount of One Billion Pesos is hereby appropriated for the
initial implementation of this Act. Thereafter, such sum as may be needed for continued
implementation of this Act shall be included in the annual General Appropriations Act

SEC. 8. Repealing Clause. ~ Republic Act No. 8479 is hereby repealed, All laws, decrees,
executive orders or parts thereof inconsistent with this Act are hereby repealed or modified
accordingly

SEC, 9. Effectivity Clause. - This Act shall take effect fifteen (15) days following its
publication in at least two (2) national newspapers of general circulation.

Approved,