HOUSE. OF REPRESENTATIVES
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RECEIVED H

SEVENTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regalar Session j

HOUSE OF REPRESENTATIVES

REGISTRATION UNIT
BILLS AND INDEX SERVICE
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House Bill No._ 864

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

In 1998, Congress enacted Republic Act No. 8479, otherwise known as the
“Downstream Oil Industry Deregulation Act”, to liberalize the downstream oil industry. It
was enacted to ensure a truly competitive market under a regime of fair prices, adequate
supply of environmentally-clean and high-quality petroleum products. The intention was to
allow free market forces to influence the prices of oil petroleum products, thus creating an
environment of competition, which was hoped to eventually lead to fait and market-driven
oil prices.

However, today, pices of petroleum products in the country have remained
vulnerable to price movements in the world market. Tt appears that the deregulation policy
even strengthened the monopoly of the oil companies as automatic oil price hikes are
allowed.

Confronted with sky-rocketing oil prices, concerns have been raised whether local oil a
industry players were accurately reflecting international price movements. Thus, there is a
need to have transparency in the pricing of oil products.

This bill seeks to put in place tighter mechanisms in the law that would ensure that
oil companies are prevented from imposing unreasonable amounts of price increase or
decrease. To achieve such objective, this measure seeks to require oil companies to submit
books of accounts and other financial documents, including verified assumptions and
computations used in the determination of price adjustments in the petroleum products.
Submission of these documents is mandatory, and on the basis of which the Department of
Energy (DOE) shall be directed to evaluate the necessity of price increases or decreases and
the reasonability of the amounts of increase or decte:

Morcover, the bill seeks to strengthen the power of the DOE by granting the
Secretary of the Department or his authorized representative visitation and inspection
powers to ensure compliance with, or to determine any violation of the provisions of the
Act. While deregulation allows industry players to determine their prices, in an industry
imbued with much public interest, the public has the tight to know whether the prices are
fairly letermined

In this respect, the immediate consideration and passage of this billis earnestly

requested
aot |

yvICTOR ‘ y.

Representative, 2" District of Tarlac


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SEVENTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )

First Regular Session )

HOUSE OF REPRESENTATIVES

864

House Bill No.

Introduced by Representative Victor A. Yap

AN ACT
PREVENTING UNREASONABLE INCREASES IN PETROLEUM PRICES,
MANDATING THE SUBMISSION AND ALLOWING THE INSPECTION OF
BOOKS OF ACCOUNTS OF PETROLEUM COMPANIES, AMENDING FOR
THE PURPOSE REPUBLIC ACT NO. 8479, OTHERWISE KNOWN AS THE
‘DOWNSTREAM OIL INDUSTRY DEREGULATION ACT”, AND FOR OTHER
PURPOSES

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

SECTION 1.

ection 14 of Republic Act No. 8479, otherwise known as the

“Downstream Oil Industry Deregulation Act’ is hereby amended to tead as follows:

Section 14, Monitoring - (a) The DOE shall monitor and publish daily

international crude oil prices, as well as follow the movements of domestic

oil prices [.] THROUGHOUT THE WHOLE SUPPLY CHAIN, IT
SHALL DETERMINE THE FACTORS, WHICH CAUSE THE
INCREASE OR DECREASE IN PRICES OF PETROLEUM
PRODUCTS AND DETERMINE THE PROPRIETY AND
NECESSITY OF SUCH INCREASE OR DECREASE, SUCH
DETERMINATION SHALL BE THE PRIMARY BASIS FOR ANY
ACTION AGAINST ANY PERSON OR ENTITY THAT MAY BE
FOUND IN VIOLATION OF THIS ACT. FOR THIS PURPOSE,
ANY PERSON OR ENTITY ENGAGED IN THE INDUSTRY
SHALL SUBMIT A VERIFIED MONTHLY REPORT TO THE
DOE OF THEIR PRICES FOR THE PROCESSING, SALE,
EXPORT, REFINING, STORAGE, TRANSPORT OR DELIVERY

OF PETROLEUM PRODUCTS, DETAILING IN THE SAID


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REPORT ALL THE FACTORS, ASSUMPTIONS, AND
FORMULATE USED IN THE COMPUTATION OF THE PRICES.
THE INFORMATION HEREIN OBTAINED SHALL BE MADE
PUBLIC FROM TIME TO TIME. It shall likewise monitor the quality of

petroleum produets and stop the operation of businesses involved in the sale

of petroleum products which do not comply with the national standards of
quality that are aligned with the national standards/protocols of quality,

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SECTION 2.Sections 15 to 29 of Republic Act No. 8479 are hereby renumbered to
become Sections 17 to 31, respectively
SECTION 3. A new Section 15 of Republic Act No. 8479 is hereby inserted to

read as follows:

SECTION 15. VISITATION AND INSPECTION POWERS - TO

ENFORCE AND ENSURE COMPLIANCE WITH THE

PROVISIONS OF THIS ACT, OR DETERMINE ANY
VIOLATION THEREOF, THE SECRETARY OF ENERGY OR
HIS DULY AUTHORIZED REPRESENTATIVES, SHALL
REGULARLY CONDUCT UNANNOUNCED INSPECTIONS OF
PREMISES AND EQUIPMENT OWNED, LEASED OR
OPERATED BY PERSONS OR ENTITIES ENGAGED IN THE
INDUSTRY, AND SHALL HAVE THE AUTHORITY TO
INSPECT THE BOOKS OF ACCOUNTS AND RECORDS OF
SUCH PERSON OR ENTITY AND TO INVESTIGATE ANY
FACT, CONDITION OR MATTER WHICH MAY BE NECESSARY
TO DETERMINE VIOLATIONS OR AID THE ENFORCEMENT
OF THIS ACT.

SECTION 4. A new Section 16 of Republic Act No. 8479 is he

as follows:

inserted to read


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SECTION 16. FOR THE DOE TO EFFECTIVELY CARRY OUT
ITS MANDATE UNDER THIS ACT, CONGRESS SHALL
APPROPRIATE THE NECESSARY AMOUNT IN THE BUDGET
OF THE DEPARTMENT IN THE GENERAL APPROPRIATIONS
ACT FOR THE MONITORING OF PRICES, QUALITY AND
LEVEL OF SUPPLY, AND FOR THE ENFORCEMENT OF THE

SECRETARY’S VISITORIAL AND INSPECTION POWERS,

SECTION 5. Separability Clause. ~ If any provision of this Act is declared
invalid or unconstitutional, the remainder of the Act shall remain valid and subsisting,
SECTION 6. Repealing Clause. — All laws, decrees, executive orders, and
issuances, or portions thereof, which are inconsistent with the provisions of this Act are
hereby repealed, amended, or modified accordingly.
SECTION 7. Effectivity Clause. ~ This Act, shall take effect fifteen (15) days

after its complete publication in at least nwo (2) newspapers of general publication.

APPROVED.