Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

EIGHTEENTH CONGRESS

Second Regular Session

House Bill No, 7928

Introduced by
APEC Party-List Representative Sergio C. Dagooc
Philreca Party-List Representative Presley C. De Jesus,
Ako Padayon Pilipino Party-List Representative Adriano A. Ebcas,
RECOBODA Party-List Representative Godofredo N. Guya

EXPLANATORY NOTE

In 1998, Republic Act No. 8479, otherwise known as “Downstream Oil Industry
Deregulation Act”, was enacted to liberalize the flow of crude oil and petroleum
products into the country by way of imposing a lax approach in supplier qualifications.
Yet, it fails to account for the undue and unreasonable increase in fuel prices, spanning
from its effectivity up to the present time.

In 2001, Republic Act No. 9136 (EPIRA) deregulated the generation sector to
encourage private companies to take part in power generation and provide for
competitive prices to attain more affordable electricity. The deregulation in R.A. 8479,
however, did not include government pricing control for oil used by the generation
companies. Despite the creation of the Energy Regulatory Commission (ERC) under
the EPIRA, which is tasked to investigate any violation of laws which affect the energy
sector, it still lacks jurisdiction over entities that provide power generation inputs,
such as oil suppliers. There is a direct relationship between oil prices and electricity
prices; any increase in oil prices, will undauntedly result to an increase in the
generation cost of electricity and passed on to the electric consumers.

Furthermore, pursuant to Section 38 of the EPIRA, the ERC was created as an
independent, quasi-judicial regulatory body. Under the same statute, the ERC shall
promote competition, encourage market development, ensure customer choice and
penalize abuse of market power in the electricity industry. To achieve the Act’s
legislative intent, it is empowered to promulgate necessary rules and regulations, and


impose fines or penalties for any non-compliance with or breach of the EPIRA, its IRR,
and other relevant laws which it is mandated to implement.

Wherefore, it is imperative that we establish the jurisdiction of both the Energy
Regulatory Commission and the Department on Energy, to investigate and monitor
matters related to the variable pricing of fuel and petroleum products charged by
power generation companies. The jurisdiction of the ERC and DOE over oil providers
under this proposed bill is limited for fact-finding purposes. With the current mark-
up on fuel and petroleum goods, the penalties and fines indicated in RA 8479 can be
considered as measly change to oil suppliers. There is a need to reinforce the sanctions
and increase the amounts stated in the RA 8479 to deter and prevent any attempt in
oil price control.

In view of the foregoing, the approval of this bill is earnestly sought.

sunciol vacooe
APEC Party-List Representative

'C. DE JESUS
Party-List Representative

Hbeeneer —

Ako Padayon Pilipino Party-List Representative

PHI

RECOBQ@DA Party-List Representative

+ Section 43, EPIRA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS

Second Regular Session

House Bill No, 7928

Introduced by Representative Presley C. De Jesus, PHILRECA Party List
Representative Godofredo N. Guya, RECOBODA Party List
Representative Sergio C. Dagooe, APEC Party List

Representative Adriano A. Ebcas, Ako Padayon Pilipino Party List

“AN ACT
EMPOWERING THE ENERGY REGULATORY COMMISSION IN
MONITORING OIL PRICES CHARGED TO OIL-BASED POWER
GENERATION FACILITIES, AMENDING REPUBLIC ACT NO. 8479,
OTHERWISE KNOWN AS THE DOWNSTREAM OIL DEREGULATION
ACT OF 1998 FOR THAT PURPOSE”

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

SECTION 1. Section 14 of Republic Act No. 8479 is hereby amended to read as
follows:

a) The DOE shall monitor and publish daily international crude oil
prices, as well as follow the movements of domestic oil prices. The
publication of the prices shall either be in a newspaper of
general circulation or online. It shall likewise monitor the quality
of petroleum products and stop the operation of businesses involved
in the sale of petroleum products with the national standards of quality
that are aligned with the international standards/protocols of quality.
The Bureau of Product Standards (BPS) of the DTI, together with the
Department of Environment and Natural Resources (DENR), the
DOE, the Department of Science and Technology (DOST),
representatives of the fuel and automotive industries and the
consumers, shall set the specifications for all types of fuel and fuel-


related products to improve fuel composition for increased efficiency
and reduced emissions. The BPS shall also specify the allowable
content of additives in all types of fuels and fuel-related products.

XXX XXX

d) Any report from any person of an unreasonable rise in the prices of
petroleum products shall be immediately acted upon. For this purpose,
the creation of DOE-DOJ Task Force is hereby mandated to determine
within thirty-(30) fifteen (15) days the merits of the report and initiate
the necessary actions warranted under the circumstances: Provided,
That nothing herein shall prevent the said task force from investigating
and/or filing the necessary complaint with the proper court or agency
moto propio; Provided, that any undue and unreasonable delay
as to the investigation, caused by the reported party, whether
directly or indirectly, shall be punishable under Section 24 of
this Act; Provided further that, in case of any discrepancy on
the capital recovery factor pertaining to fuel costs used by oil-
based power generation companies, as compared to the
prices published under subsection (a) of this provision, shall
vest original and concurrent jurisdiction to the Energy
Regulatory Commission and Department of Energy.

SECTION 2. Section 24 of Republic Act No. 8479 shall be amended as follows:

SEC. 24. Penal Sanction. — Any person who violates any of the provisions
of this Act shall suffer the penalty of three-€3} six (6) months to one
) 6 years imprisonment and a fine ranging from Fifty Five
hundred thousend—peses—(P50,000:00) (P500,000) to Three
hundred-thousand Three million pesos (P3,000,000.00).

SECTION 3. Repealing Clause. - All laws, decrees, orders, rules and regulations,
or parts thereof, inconsistent with the provisions of this Act are hereby amended or
repealed accordingly.

SECTION 4. Separability Clause. -The provisions of this Act are hereby declared
separable. In the event that any provision hereof is rendered unconstitutional, those
that are not affected shall remain valid and effective.

SECTION 5. Effectivity. - This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or a newspaper of general circulation

Approved.