Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _____ 
------------------------------------------------------------------------------------------------------------- 
Introduced by Honorable Representatives 
ARLENE D. BROSAS (Gabriela Women’s Party); 
FRANCE L. CASTRO (ACT Teachers Partylist); 
and RAOUL DANNIEL A. MANUEL (Kabataan Partylist) 
------------------------------------------------------------------------------------------------------------- 
AN ACT 
REGULATING THE DOWNSTREAM PETROLEUM INDUSTRY AND FOR 
OTHER RELATED PURPOSES 
EXPLANATORY NOTE 
The relentless oil price increases in the country even when worldwide oil prices are 
going down is not only a real cause for alarm but even an indictment of the effects of the 
neoliberal system and the deregulation of the country‟s oil industry.  Add to this the 
undeniable fact that oil prices are also high because of the control and influence of giant 
transnational oil corporations on the global oil industry.   
The big transnational oil companies: Exxon-Mobil, Royal Dutch Shell, Chevron-
Texaco (of which marketing arm is Caltex), British Petroleum (BP), and CFP-Total have 
almost complete control over the oil prices they collusively set worldwide. Even if the largest 
oil producing countries (Saudi Arabia, Iran, Venezuela, Mexico, and China) control 90 
percent of the world‟s oil reserves, the five transnational oil companies can dictate world 
prices because they control 60 percent of oil production and hold all levels of the market 
through their vast global network of exploration and exploitation sites, partnerships with 
nationalized oil companies, refineries, pipelines, tankers, and stations. 
The Big Three (or the local subsidiaries of Shell and Caltex plus Petron), claim that 
they do not overprice, that they set prices based on the price increases of Dubai oil 
exchanged in the spot market and on peso-dollar exchange rate fluctuations. Moreover, they 
deny the existence of a cartel, alleging that they merely and coincidentally follow the 
movements of world oil prices. They claim these even as they are minimally affected by 
prices in world markets and even as they are able to trade in the same currency between 
subsidiaries. 
During the first half of 2022, oil companies implemented a nonstop barrage of oil 
price increases based on speculative pricing that is hinged on the Russia-Ukraine conflict. 
While the Philippines imports most or 99.89 percent of its oil consumption, Russia accounts 
for a very small fraction of the total oil imports. The deregulated oil industry has also allowed 
local oil firms to implement price hikes way above what is warranted by global oil price 
increases while reducing them by less than downward movements call for.  
August 2, 2022
4:40 pm
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Prices of diesel and gasoline have almost breached the P100-per-liter mark in June 
2022 amid successive rounds of price hikes. Overall, pump prices in Metro Manila were 
raised 19 times as of June 21, 2022, bringing unleaded gasoline prices to between P76.95 to 
P97.90 per liter, diesel to between P81.55 to P95.20 per liter, and kerosene to between 
P89.64 to P99.04 per liter.  Liquefied petroleum gas (LPG) is priced between P840.00 to 
P1,027.00 per 11-kilogram tank in Metro Manila. 
 
More than 99 percent of the country‟s petroleum requirements are imported, 
rendering the country exceedingly vulnerable to the dictates of big transnational 
corporations. The worst implication of this is that our severe dependence on such 
corporations, which control not only the importation, refining, and retailing of crude and 
petroleum products from abroad, but also control the exploration, exploitation, refining, 
retailing, and even re-exportation of our country‟s indigenous petroleum and petroleum-
based products, deprives us the opportunity to be self-sufficient and earn from the 
development of our own oil industry. 
 
Even without factoring in the increases in the world demand for oil and the artificial 
effects of speculation, world oil prices are unreasonably and unjustifiably high because they 
are under the control of monopolistic transnational oil corporations. Given this set-up, 
government regulation is warranted since the State has a responsibility to promote social 
justice and an equitable national economy and patrimony. 
 
Republic Act No. 8479, or the “Downstream Oil Industry Deregulation Act of 1998” 
holds the wrong premise that the world pricing of petroleum and petroleum products is fair 
and justifiable. Hence, this deregulation Act merely advocates fair pricing through the 
“mediation” between big oil companies (refiners and importers) and relatively small dealers, 
haulers, and LPG distributors; the opening of the market to new industry participants 
nonetheless dependent on big transnational oil corporations; and the relatively insignificant 
financial and operational support for small-scale gasoline station retailers. 
 
From the very beginning, R.A. 8479 was bound to fail in implementing fair prices 
since it ignored monopoly-pricing practices and cartel behavior by the giant transnational oil 
corporations. Worse, deregulation had given transnational oil corporations even more room 
to manipulate prices through automatic oil price hikes (OPH); less transparency in pricing, 
profits, and operations; and virtually no accountability to the consuming public. 
 
Deregulation has allowed oil price increases to go unchecked. With petroleum as a 
sensitive commodity, because price directly affects the cost of almost all other commodities 
and services, including essentials such as food, housing, social services, as well as 
transportation, deregulation has given transnational oil corporations even more leeway to 
influence the country‟s cost of living, livelihoods, business and commerce, employment, and 
the National Budget. 
 
There is a pressing need to regulate the oil industry to protect the majority of Filipinos 
from current runaway increases in oil prices. Regulation can only be effective and truly 
beneficial if it is part of a program to institutionalize national oil industrialization, so that local 
oil prices can be brought down from unreasonable and unjustifiable levels set by giant 
transnational oil corporations and can be prevented from falling prey to further monopoly 
pricing and manipulation. 
 
This Bill therefore requires the regulation of the petroleum industry through the 
creation of a petroleum regulatory council and a buffer fund which shall instead solely serve 
to cushion the impact on consumers against drastic increases in petroleum prices – unlike 
the Oil Price Stabilization Fund (OPSF) that reimbursed oil companies for “cost under-
recoveries.” 


This Bill was first filed by Bayan Muna Partylist during the 13th Congress as House 
Bill No. 5272. It was refiled in the 14th to 18th Congresses as HB Nos. 3029, 4355, 173, 
3676, and 4711, respectively. Immediate approval of this Bill is earnestly sought in the 19th 
Congress. 
Approved, 
________________________ 
     ARLENE D. BROSAS 
Gabriela Women’s Party 
____________________ 
 ___________________________ 
 FRANCE L. CASTRO 
RAOUL DANNIEL A. MANUEL 
ACT Teachers Partylist 
 Kabataan Partylist 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _____ 
------------------------------------------------------------------------------------------------------------- 
Introduced by Honorable Representatives 
ARLENE D. BROSAS (Gabriela Women’s Party); 
FRANCE L. CASTRO (ACT Teachers Partylist); 
and RAOUL DANNIEL A. MANUEL (Kabataan Partylist) 
------------------------------------------------------------------------------------------------------------- 
AN ACT 
REGULATING THE DOWNSTREAM PETROLEUM INDUSTRY AND FOR 
OTHER RELATED PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. - This Act shall be known as the “Downstream Oil Industry 
Regulation Act of 2022.” 
SECTION 2. Declaration of Policy. - It is enshrined in the Philippine Constitution that “the 
State shall promote social justice in all phases of national development” (Article II, Section X) 
and “shall pursue a trade policy that serves the general welfare and utilizes all forms and 
arrangements of exchange on the basis of equality and reciprocity” (Article XII, Section XIII). 
Moreover, the Constitution also mandates “the State shall regulate or prohibit monopolies 
when the public interest so requires. No combinations in restraint of trade or unfair 
competition shall be allowed” (Article XII, Section XIV). 
Consistent with the foregoing, crude oil and socially and economically sensitive refined 
petroleum or petroleum products, being vital to national security and their supply at 
reasonable prices being essential to the general welfare, it is hereby declared to be the 
policy of the State that the business of importing, exporting, re-exporting, marketing, 
distributing, and selling both at wholesale and retail of such products, as well as operations 
and activities of natural and juridical persons, firms, and entities engaged in such activities, 
shall be carried out in a manner consistent with the public interest. This policy aims to attain 
the following objectives and purposes: 
(a) To assure that locally refined and processed petroleum products, as well as imported
crude oil and processed petroleum, shall be primarily for the benefit of the general
welfare; and
(b) To assure the public of reasonable prices for petroleum products and to prevent
collusive practices in the industry, particularly as to prices.
SECTION 3. Coverage. - This Act shall apply to all natural and juridical persons, firms, and 
entities engaged in the business of importing, exporting, re-exporting, marketing, distributing, 
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and selling both at wholesale and retail crude oil and socially and economically sensitive 
petroleum products for their own use or for the use of other natural and juridical persons, 
firms, and entities engaged in any and all activities of the petroleum industry. 
 
SECTION 4. Definition of Terms. 
 
(a) “Council” shall mean the Petroleum Regulatory Council (PRC). 
 
(b) “Fund” shall mean the Oil Price Buffer Fund (OPBF). 
 
(c) “Petroleum” shall refer to the naturally occurring mixture of compounds of hydrogen 
and carbon with a small proportion of impurities and shall include 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 
and/or other stratified mineral fuel deposits.  
 
(d) “Crude oil” or “oil” shall be used interchangeably with “petroleum.” 
 
(e) “Socially and economically sensitive petroleum products” shall refer to liquefied 
petroleum gas (LPG), naphtha, gasolines, kerosenes, automatic/industrial diesel oils, 
and industrial/residual fuel oils. 
 
SECTION 5. Creation of the Petroleum Regulatory Council. - There is hereby created an 
independent, quasi-judicial regulatory body to be named the Petroleum Regulatory Council 
(PRC), hereafter referred to as the Council.  
 
The Council shall be composed of a Chairperson and six (6) Members to be appointed by 
the President of the Philippines. The Chairperson and the Council Members shall be natural-
born citizens and residents of the Philippines; persons of good moral character; at least 
thirty-five (35) years of age; of recognized competence in any of the following fields: energy, 
law, economics, finance, commerce and industry, and management; or the transportation 
and consumer sectors; and with at least five (5) years of actual and distinguished experience 
in their respective fields of expertise or sectors: Provided, That out of the six (6) members of 
the Council, at least one (1) shall have had (10) years experience in the fields of 
management, economics, or commerce and industry; one (1) shall be a certified public 
accountant with at least ten (10) years experience in active practice; and one (1) shall be a 
sector leader who has been active for at least ten (10) years in the transportation, consumer, 
or industrial sector. 
 
The term of office of the Chairperson and the Council Members shall be four (4) years: 
Provided, That for the first appointees, the Chairperson shall hold office for four (4) years, 
two (2) Members shall hold office for four (4) years, another two for three (3) years, and the 
remaining two (2) Members shall hold office for two (2) years:  Provided further, That for 
subsequent appointees, the successor of each Member shall have the same tenure as his 
predecessor:  Provided further, That appointment to any vacancy shall only be for the 
unexpired term of the predecessor: Provided finally, That in no case shall any member serve 
for more than four (4) years in the Council. 
 
 
Within three (3) months from the creation of the Council, the Chairperson shall submit for the 
approval by the President of the Philippines the new organization structure and plantilla 
positions necessary to carry out the powers and functions of the Council. 
 
The Chairperson and Members of the Council shall assume office upon their appointment 
and the administration of their respective oaths of office. 
 


 
 
 
 
The Chairperson and the other members of the Council shall not be exempt from 
administrative cases. A preventively suspended Chairperson shall be temporarily replaced 
by the most senior, in terms of tenure, of the six (6) Members. The preventive suspension of 
the Chairman shall not toll the running of his/her term of office.  In case of the Chairman‟s 
removal from office prior to the expiration of his/her term of office, the President shall appoint 
a new Chairman who shall serve only for the unexpired portion of the removed Chairman‟s 
term of office. 
 
No person who, within four (4) years immediately prior to his appointment, has worked or is 
working in any firm engaged in the petroleum industry or any other entity whose main 
business is directly or indirectly related to any such firm shall be appointed to the Council. 
The Chairperson and Members of the Council shall be prohibited from holding any interest 
whatsoever, either as investor, stockholder, officer, or director, in any company or entity 
engaged in the business of exploring, exploiting, importing, exporting, re-exporting, shipping, 
transporting, processing, refining, storing, marketing, distributing, and selling both at 
wholesale and retail any petroleum resource. In case they do, they must divest through sale 
or legal disposition of any and all interest in the petroleum industry upon assumption of 
office. 
 
The presence of at least four (4) members of the Council shall constitute a quorum and the 
vote of three (3) members in a meeting where there a quorum is present shall be necessary 
for the adoption of any rules, ruling, order, resolution, decision, or other act of the Council in 
the exercise of its quasi-judicial functions. 
 
Former Chairpersons and members of the Council are prohibited from working directly or 
indirectly in any firm engaged in the petroleum industry or any other entity whose main 
business is directly or indirectly related to any such firm within one (1) year from the time 
they have ceased to be officially connected with the Council. 
 
The Chairperson and the Council Members shall devote their full time to the Council and 
shall not accept any other employment while in office. 
 
SECTION 6. Compensation and Other Emoluments for the Council. - The compensation 
and other emoluments for the Chairperson, Members, staff, and personnel of the Council 
shall be covered by Republic Act No. 6758, otherwise known as the "Salary Standardization 
Act".  
 
The Chairperson of the Council shall be entitled to the same salaries, allowances, and 
benefits equal to those of a Department Secretary while the Council Members shall receive 
the same equal to those of a Department Undersecretary. The Chairperson and the other 
members of the Council shall, upon completion of their term or upon becoming eligible for 
retirement under existing laws, be entitled to the same retirement benefits and the privileges 
provided for Department Secretaries and Department Undersecretaries, respectively. 
 
SECTION 7. Functions, Powers, and Duties of the Council Upon Notice and Hearing. - 
At the effectivity of this act, industry averages of prevailing market prices of socially and 
economically sensitive petroleum and petroleum products shall be the first set of prices. Any 
succeeding modification shall hereby be required to undergo public hearings, convened by 
the Council, before such become effective.  
 
The Council shall revise oil prices only upon proper notice and hearing, in the exercise of its 
powers and functions, as follows:  
 
(a) 
In revising prices, the Council shall be guided by the following considerations: 
 


 
 
 
 
(a1) 
Whether claimed increases or decreases in costs, sales, or profits are real or 
simulated; 
 
(a2) 
Whether expenses and costs which are claimed to have been incurred, or are 
being incurred, or are to be incurred are reasonable; 
 
(a3) 
The impact of the proposed prices or change therein on the economy and on 
the consuming public, particularly low-income groups and industries essential to the 
national welfare or security, given the daily cost of living and predominant wages; 
 
(a4) 
The component costs and the profit levels or rates of return not only of the 
petroleum industry but also of other manufacturing industries in the country; and 
 
(a5) 
The ability of the levels of the Oil Price Buffer Fund to maintain, through 
subsidy disbursements, current oil price levels until the next resetting. 
 
(b) 
Hearings must have in attendance organizations from different sectors affected by 
the following regulations, including but not limited to consumer groups, the transport sector, 
other representative people‟s organizations, producers, and sellers, as well as independent 
experts. 
 
Advance details of these public hearings, as well as for hearings required by Section 7 of 
this Act, shall be published in at least two (2) newspapers of major circulation at least two (2) 
weeks before the scheduled consultations. 
 
(c) 
In exercise of its duties, the Council shall, for every hearing convened: 
 
(c1) 
Present a concise report on the operations regarding the administration of the 
Oil Price Buffer Fund, including its complete sources and disbursements, since the 
last hearing or oil price adjustment; 
 
(c2) 
Summarize data justifying and supporting the last oil price adjustments and 
how these have changed and contributed to the necessity to revise oil prices; and 
 
(c3) 
Publish the proceedings of concluded hearings in at least two (2) newspapers 
of national circulation at least one month before the implementation of newly set oil 
prices, for which period the Council shall be open to petitions ad appeals subject for 
review by the Council. 
 
SECTION 8. Petitions for Hearings. - Local oil subsidiaries, wholesalers, and retailers are 
hereby required to file a petition with the Council every time they intend to implement oil 
price hikes. People‟s organizations, non-government organizations, and citizens may as well 
file petitions with the Council proposing to decrease oil prices. 
 
 
SECTION 9. General Jurisdiction, Powers, Functions, and Duties of the Council. - The 
Council shall strictly regulate the pricing of crude oil and socially and economically sensitive 
petroleum products at the levels of marketing, distribution, wholesale, and retail in the 
operations and activities of natural and juridical persons, firms, and entities engaged in such 
activities.  
 
For this purpose, the general jurisdiction, powers, functions, and duties of the Council shall 
include the following: 
 


 
 
 
 
(a) 
Price monitoring and compilation of the prices involved in the movement of raw 
materials or finished products in the marketing, distribution, and sale both at wholesale and 
retail, of petroleum and socially and economically sensitive petroleum-based resources. In 
order that no unnecessary costs may be included in the pricing of petroleum and its 
derivatives, price monitoring and compilation shall also be done at the stages of shipment, 
transport, and storage. This shall be conducted in coordination with existing, independent 
monitoring bodies. These records shall be submitted weekly, or upon request, for the review 
of the Council. For cases where persons, firms, or entities refuse such information, the 
Council shall issue subpoenas and subpoenas duces tecum to compel such parties; 
 
(b) 
Compilation and analysis of information hereby required from local importers of crude 
oil and socially and economically refined petroleum products, refiners, dealers, and 
petroleum marketing companies on the following:  
 
(b1) 
Comprehensive sales reports; 
 
(b2) 
Inventories; 
 
(b3) 
Prices of all involved products at various time intervals, as determined by the 
Council for petroleum and petroleum products; and 
 
(b4) 
Demand forecasts for subsequent time intervals, as determined by the 
Council for involved petroleum and petroleum products. 
 
(c) 
The Council shall pursue systematized, random statistical sampling surveys to 
determine adherence to and violations of price regulation by the Council. These surveys 
shall be done by technical groups formed by the Council, in close coordination with Council-
accredited organizations that undertake their own petroleum price surveys; 
 
(d) 
Issue subpoena and subpoena duces tecum in any inquiry, study, hearing, 
investigation, or proceedings which it may decide to undertake in the exercise of its powers, 
functions, and duties under this Act; and 
 
(e) 
Promulgate rules and regulations relevant to procedures governing hearings before it 
and enforce compliance, through the imposition of penalties, with any rule, ruling, regulation, 
order, resolution, decision, or other requirements of this Act or acts of the Council in the 
exercise of its quasi-judicial functions; Provided, That said rules and regulations take effect 
fifteen (15) days after publication in the Official Gazette. 
 
SECTION 10. Council Staff. -  The Chairperson and the Members of the Council shall 
appoint and maintain their adequate officers, staff, and personnel, including technical 
boards, to be maintained according to the functions, powers, and duties of the Council. 
 
SECTION 11. Budget of the Petroleum Regulatory Council. - The amount of One 
Hundred Fifty Million Pesos (PhP150,000,000.00) is hereby allocated from the General Fund 
not otherwise appropriated for the initial operations of the Petroleum Regulatory Council. 
Thereafter, the annual budget of the Council shall be included in the regular or special 
appropriations under the General Appropriations. 
 
SECTION 12. Procedures of the Council. - All inquiries, studies, hearings, investigations, 
and proceedings conducted by the Council shall be governed by rules adopted by the 
Council, and in the conduct thereof the Council shall not be bound by the technical rules of 
evidence: Provided, That the Council may summarily punish for contempt by a fine not 
exceeding five thousand pesos or by imprisonment not exceeding thirty (30) days or both, 
any person guilty of such misconduct in the presence of the Council or so near thereto as to 


 
 
 
 
seriously interrupt any hearing or session or any proceedings before it, including cases in 
which a person willfully fails or refuses, without just cause, to comply with summons, 
subpoena ad testificandum, subpoena duces tecum, decision or order, rules and regulations 
legally issued or promulgated by the Council; or being present at a hearing, session, or 
investigation, refuses to be sworn as a witness or to answer questions when lawfully 
required to do so, or to furnish information required by the Council. The sheriff and other 
police agencies of the place where the hearing or investigation is conducted shall, upon 
request of the Council, assist it to enforce the provisions of this Section. 
 
The Council may, in any inquiry, study, hearing, investigation, or proceeding, by order in 
writing, cause the deposition of witnesses within or without the Philippines to be taken in the 
manner prescribed by the Rules of Court.  
 
SECTION 13. Creation of the Oil Price Buffer Fund. - There is hereby created a trust fund 
directly under the custody and administration of the Petroleum Regulatory Council as an 
account booked under its liabilities. The trust fund shall be designated as the Oil Price Buffer 
Fund (OPBF), hereon referred to as the Fund, for the strict and unique purpose of 
cushioning consumers against the frequent and drastic price increases of local petroleum 
and petroleum products.  
 
SECTION 14. Disbursement of the Fund.  - The Fund shall solely and strictly release 
disbursements to subsidize local market oil price fluctuations between price resettings, as 
settled at hearings conducted by the Council under Section 7 of this Act. The Fund shall 
disburse as subsidies, initially on the first year upon the effectivity of this Act, 2.5% of 
cumulative increases in market prices across all socially and economically sensitive 
petroleum and petroleum products, between public hearings, which decide on the 
modification of previously set prices. Revised amounts shall become the new basis for Fund 
disbursements. When world oil prices decrease, the Council shall retain its existing prices, 
accrue all differences in set prices and market prices to the Fund, and maintain current 
prices until the next hearing modifies such. Modifications of this subsidy percentage shall 
likewise undergo public hearings before approval, and shall mainly depend on the needs of 
consumers and industries and on the present levels of the Fund. 
 
The Oil Price Buffer Fund shall be strictly prohibited from being disbursed for the following 
purposes: 
 
(a) 
To reimburse persons, firms, and entities engaged in the petroleum industry for cost 
increases on crude oil and imported petroleum products resulting from exchange rate 
adjustment and/or increases in world market prices of crude oil; 
 
(b) 
Cost “underrecoveries” incurred by persons, firms, and entities engaged in the 
petroleum industry as a result of fuel oil sales to the National Power Corporation (NPC); 
 
(c) 
Projects relating to the consumption or use of crude oil, gas, and other petroleum 
products; 
 
(d) 
For the development of other sources of energy; 
 
(e) 
For exploration and researches on conservation, anti-pollution, and other similar 
studies to subsidize importation of crude oil and refined petroleum products by government 
agencies, or government-owned or controlled corporations (GOCCs); and 
 
(f) 
For any such purpose other than cushioning consumers against the high prices of 
local petroleum and petroleum products. 
 


 
 
 
 
The President of the Philippines is hereby prohibited from sourcing from the Oil Price Buffer 
Fund, through Executive Order, any projects, programs, and other activities whatsoever. 
 
SECTION 16. Fund Investments. - The Petroleum Regulatory Council may, after the first 
five years of the existence of the Fund, invest part of the proceeds from the Fund in secure 
bank deposits like regular savings accounts, current accounts, and time deposits: Provided, 
That these deposits are insured for the maximum insurable amounts in the banking industry: 
Provided further, That the Chairperson and all the Members of the Council are informed and 
approve of each and every Fund investment, in specific amounts: Provided further, That 
proceeds from the Fund may only be invested when the size of the Fund has reached a 
minimum amount wherein it is ten (10) times the average disbursement for the preceding 
five years: Provided finally, That all earnings from such placements shall strictly and solely 
redound to the Fund.  
 
SECTION 17. Sources of the Oil Price Buffer Fund. - The Fund shall be sourced from the 
following: 
 
I. 
Excise Taxes on Petroleum-based Manufactured Oils and Other Fuels 
 
The Oil Price Buffer Fund shall be allocated twenty-five percent (25%) of the proceeds of 
excise taxes on covered petroleum-based manufactured oils and other fuels. 
 
Section 148 of Republic Act No. 8424, otherwise known as Tax Reform Act of 1997, as 
amended by Republic Act No. 9337, is hereby amended to read: 
 
“SEC. 148. Manufactured Oils and Other Fuels. – There shall be collected on refined and 
manufactured mineral oils and motor fuels, the following excise taxes which shall attach to 
the goods hereunder enumerated as soon as they are in existence as such:  
 
“(a) XXXX; 
 
“(b) XXXX; 
 
“(c) XXXX; 
 
“(d) XXXX; 
 
“(e) Naphtha, regular gasoline and other similar products of distillation, per liter of volume 
capacity, Four pesos and thirty-five (P4.35): [Provided, however, That naphtha, when used 
as a raw material in the production of petrochemical products or as replacement fuel for 
natural-gas-fired-combined cycle power plant, in lieu of locally-extracted natural gas during 
the non-availability thereof, subject to the rules and regulations to be promulgated by the 
Secretary of Energy, in consultation with the Secretary of Finance, per liter of volume 
capacity, Zero (P0.00):] Provided, [further,] That the by-product including fuel oil, diesel fuel, 
kerosene, pyrolysis gasoline, liquefied petroleum gases and similar oils having more or less 
the same generating power, which are produced in the processing of naphtha into 
petrochemical products shall be subject to the applicable excise tax specified in this Section, 
except when such by-products are transferred to any of the local oil refineries through sale, 
barter or exchange, for the purpose of further processing or blending into finished products 
which are subject to excise tax under this Section; : PROVIDED FURTHER, THAT OF 
TOTAL EXCISE TAXES COLLECTED ON NAPHTHA, REGULAR GASOLINE, AND 
OTHER SIMILAR PRODUCTS OF DISTILLATION, TWENTY-FIVE PERCENT (25%) 
SHALL ACCRUE DIRECTLY TO THE OIL PRICE BUFFER FUND; 
 


 
 
 
 
“(f) Leaded premium gasoline, per liter of volume capacity, Five pesos and thirty-five 
centavos (P5.35); unleaded premium gasoline, per liter of volume capacity, Four pesos and 
thirty-five centavos (P4.35): PROVIDED, THAT OF TOTAL EXCISE TAXES COLLECTED 
ON LEADED PREMIUM GASOLINE, TWENTY-FIVE PERCENT (25%) SHALL ACCRUE 
DIRECTLY TO THE OIL PRICE BUFFER FUND; 
 
“(g) XXXX; 
 
“(h) XXXX; 
 
“(i) XXXX; 
 
“(j) XXXX; 
 
“(k) XXXX; and 
 
“(l) XXXX.” 
 
 
II. 
Value-Added Taxes on the Sale of Petroleum and Petroleum Products 
 
The Oil Price Buffer Fund shall be allocated twenty-five percent (25%) of the proceeds of 
value-added taxes on petroleum-based manufactured oils and other fuels. 
 
Section 106 of Republic Act No. 8424, otherwise known as Tax Reform Act of 1997, as 
amended by Republic Act No. 9337, is hereby amended to read: 
 
“SEC. 106. Value-Added Tax on Sale of Goods or Properties. –  
 
 “(A) XXXX:  
 
“(i) XXXX; or 
“(ii) XXXX. 
 
 
“(1) XXXX. 
“(a) XXXX; 
“(b) XXXX; 
“(c) XXXX; 
“(d) XXXX; and 
“(e) XXXX; 
 
“The term “gross selling price” means the total amount of money or its equivalent which the 
purchaser pays or is obligated to pay to the seller in consideration of the sale, barter or 
exchange of the goods or properties, excluding the value-added tax. The excise tax, if any, 
on such goods or properties shall form part of the gross selling price. 
 
PROVIDED, THAT OF THE TOTAL VALUE-ADDED TAXES COLLECTED ON LIQUEFIED 
PETROLEUM 
GAS 
(LPG), 
NAPHTHA, 
GASOLINES, 
KEROSENES, 
AUTOMATIC/INDUSTRIAL DIESEL OILS, AND INDUSTRIAL/RESIDUAL FUEL OILS, 
TWENTY-FIVE PERCENT (25%) SHALL ACCRUE DIRECTLY TO THE OIL PRICE 
BUFFER FUND; 
 
“(2) XXXX: 
 


 
 
 
 
“(a) XXXX: 
“(1) XXXX; 
“(2) XXXX; 
“(3) XXXX; 
“(4) XXXX; and 
“(5) XXXX. 
“(6) The sale of goods, supplies, AND equipment [and fuel] to persons engaged in 
international shipping or international air transport operations: PROVIDED, THAT THE 
TERM “GOODS” DOES NOT INCLUDE PETROLEUM AND PETROLEUM PRODUCTS 
AND BY-PRODUCTS. 
 
PROVIDED, THAT OF THE TOTAL VALUE-ADDED TAXES COLLECTED ON LIQUEFIED 
PETROLEUM 
GAS 
(LPG), 
NAPHTHA, 
GASOLINES, 
KEROSENES, 
AUTOMATIC/INDUSTRIAL DIESEL OILS, AND INDUSTRIAL/RESIDUAL FUEL OILS, 
TWENTY-FIVE PERCENT (25%) SHALL ACCRUE DIRECTLY TO THE OIL PRICE 
BUFFER FUND; 
 
“(b) XXXX. 
“(c) XXXX. 
 
PROVIDED, THAT OF THE TOTAL VALUE-ADDED TAXES COLLECTED ON LIQUEFIED 
PETROLEUM 
GAS 
(LPG), 
NAPHTHA, 
GASOLINES, 
KEROSENES, 
AUTOMATIC/INDUSTRIAL DIESEL OILS, AND INDUSTRIAL/RESIDUAL FUEL OILS, 
TWENTY-FIVE PERCENT (25%) SHALL ACCRUE DIRECTLY TO THE OIL PRICE 
BUFFER FUND. 
 
 
“(B) XXXX:  
“(1) XXXX; 
“(2) XXXX: 
“(a) XXXX; or 
“(b) XXXX; 
“(3) XXXX; and 
“(4) XXXX. 
 
“(c) XXXX.” 
 
III. 
Value-Added Taxes on the Sale of Services Directly Involving Petroleum and 
Petroleum Products 
 
Section 108 of Republic Act No. 8424, otherwise known as Tax Reform Act of 1997, as 
amended by Republic Act No. 9337, is hereby amended to read: 
 
“SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. -  
 
“(A) XXXX:  
 
“(i) XXXX; or  
“(ii) XXXX. 
 
“The phrase “sale or exchange of services” means the performance of all kinds or services in 
the Philippines for others for a fee, remuneration or consideration, including those performed 
or rendered by construction and service contractors; stock, real estate, commercial, customs 
and immigration brokers; lessors of property, whether personal or real; warehousing 
services; lessors or distributors of cinematographic films; persons engaged in milling 


 
 
 
 
processing, manufacturing or repacking goods for others; proprietors, operators or keepers 
of hotels, motels, rest houses, pension houses, inns, resorts; proprietors or operators of 
restaurants, refreshment parlors, cafes and other eating places, including clubs and 
caterers; dealers in securities; lending investors; transportation contractors on their transport 
of goods or cargoes, including persons who transport goods or cargoes for hire another 
domestic common carriers by land, air and water relative to their transport of goods or 
cargoes; common carriers by air and sea relative to their transport of passengers, goods or 
cargoes from one place in the Philippines to another place in the Philippines; sales of 
electricity by generation companies, transmission, and distribution companies; services of 
franchise grantees of telephone and telegraph, radio and television broadcasting and all 
other franchise grantees except those under Section 119 of this Code; services of banks, 
non-bank financial intermediaries and finance companies; and non-life insurance companies 
(except their crop insurances), including surety, fidelity, indemnity and bonding companies; 
and similar services regardless of whether or not the performance thereof calls for the 
exercise or use of the physical or mental faculties: PROVIDED, THAT OF THE TOTAL 
VALUE-ADDED TAXES COLLECTED ON LIQUEFIED PETROLEUM GAS (LPG), 
NAPHTHA, GASOLINES, KEROSENES, AUTOMATIC/INDUSTRIAL DIESEL OILS, AND 
INDUSTRIAL/RESIDUAL FUEL OILS, TWENTY-FIVE PERCENT (25%) SHALL ACCRUE 
DIRECTLY TO THE OIL PRICE BUFFER FUND; 
 
“The phrase „sale or exchange of services‟ shall likewise include:  
“(1) XXXX; 
“(2) XXXX; 
“(3) XXXX; 
“(4) XXXX; 
“(5) XXXX. 
“(6) XXXX; 
“(7) XXXX; and 
“(8) XXXX. 
 
 
“XXXX. 
 
 
“XXXX. 
 
“(B) XXXX; 
“(1) XXXX; 
“(2) XXXX; 
“(3) XXXX; 
“(4) XXXX; 
“(5) XXXX; 
“(6) XXXX; and 
“(7) XXXX. 
 
“(c) XXXX.” 
 
IV. 
Increases in Taxes on Petroleum and Petroleum Products 
 
Of any authorized increases in the tax collection from ad-valorem tax, excise tax, or customs 
duty imposed on petroleum and petroleum products, through Executive Orders of the 
President or through subsequent Congressional legislation, twenty-five percent (25%) shall 
hereby directly accrue to the Oil Price Buffer Fund under the Petroleum Regulatory Council. 
 
V. 
Extraordinary Gains 
 


 
 
 
 
Whenever an authorized increase in the prices of petroleum products will result in an 
extraordinary gain from existing inventories, the Council is hereby empowered to take 
measures, including the payment in the full amount of the extraordinary gain by the persons, 
firms, or entities benefited to the Oil Price Buffer Fund. 
 
VI. 
Proceeds collected from the penalties for violations, as stated under Section 
19 of this Act. 
 
SECTION 18. Annual Reports of the Council. - The Council shall publish an annual report, 
with or without the convening of hearings, on the administration of the Oil Price Buffer Fund, 
including its complete sources and disbursements; data that justify and support any and all 
adjustments in petroleum prices in the past year; information on the general state and 
prospects of the local downstream petroleum industry; and other such vital information 
derived from inquiries, studies, and investigations by the Council in the exercise of its 
powers, functions, and duties. 
 
SECTION 19. Penalties for Violations. 
 
(a) 
Any person who gives false or misleading data or information or willfully or through 
gross negligence, conceals or falsifies a material fact, in any investigation, inquiry, study, or 
other proceeding held pursuant to this Act, shall be punished with imprisonment of not less 
than two but not more than six months, and with a fine of not less than one thousand but not 
more than ten thousand pesos:  Provided, however, That if the false or misleading data or 
information shall have been given under oath, the maximum penalty for giving false 
testimony or perjury shall be imposed; 
 
(b) 
Any person who violates any provision of this Act or any order, decision, ruling, or 
regulation of the Council shall, upon conviction, be sentenced for a period of not less than 
six months but not more than five years and a fine of not less than ten thousand pesos but 
not more than fifty thousand pesos.  If the offender be a corporation, partnership, or juridical 
person, the penalty shall be imposed on the officer or officers responsible for permitting or 
causing a violation by the corporation, partnership, or juridical person of the provisions of this 
Act; 
 
(c) 
If the offender is a government official or employee, the maximum penalty prescribed 
in paragraph (b) shall be imposed and the offender shall suffer the additional penalty of 
perpetual disqualification from public office without prejudice to any administrative action 
against him; 
 
(d) 
If the offender is a member of the Petroleum Regulatory Council or any of its 
attached agencies and companies, and the commission of the offense is attended by clear 
abuse of discretion on his part, or by any corrupt practice defined in Republic Act No. 3019, 
otherwise known as the “Anti-Graft and Corrupt Practices Act”, or other similar irregularity, 
the penalty imposed shall be a fine of one hundred thousand pesos and imprisonment of not 
less than ten years.  A similar penalty shall be imposed upon any private person, whether in 
the government service or not, who induces, aids, or abets the offender in the commission of 
the offense; 
 
(e) 
It shall be an offense, penalized as provided in paragraph (c) or (d) above, whichever 
may be applicable, for any person serving in the Petroleum Regulatory Council or any of its 
attached agencies and companies, either as a Chairperson, Member, or as a member of the 
staff to directly or indirectly be employed by, or to receive any compensation from, or to have 
any direct or indirect financial interest in, any firm engaged in the business of exploring, 
exploiting, importing, exporting, re-exporting, shipping, transporting, processing, refining, 


 
 
 
 
storing, marketing, distributing, and selling both at wholesale and retail any petroleum 
resource; and 
 
(f) 
Any alien violating this Act shall, in addition to the penalty herein provided, be 
deported after service of sentence and shall not be permitted reentry into the Philippines. 
 
(g) 
All monetary penalties shall directly accrue to the Oil Price Buffer Fund. 
 
SECTION 20. Implementing Rules and Regulations. - The Petroleum Regulatory Council 
shall formulate and issue the necessary implementing rules and regulations within thirty (30) 
days after the effectivity of this Act. 
 
SECTION 21. General Repealing Clause. 
 
(a) 
Republic Act No. 8479, also known as the “Downstream Oil Industry Deregulation Act 
of 1998” is repealed. 
 
(c) All other laws, decrees, executive orders, rules and regulations, or parts thereof 
inconsistent with any of the provisions of this Act, are hereby repealed or amended 
accordingly. 
 
SECTION 22. Separability Clause.  -  If, for any reason, any section or provision of this Act 
is declared unconstitutional or invalid, such other sections or provisions not affected thereby 
shall remain in full force and effect. 
 
SECTION 23. Effectivity. – This Act shall take effect fifteen days after its complete 
publication in two (2) national newspapers of general circulation. 
 
 
Approved,