FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

introduced by Representative Rufus 8. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Biti No,_ 3416

EXPLANATORY NOTE

For the first two months and a half of 2011, oil companies in the Philippines
have already increased gas and diesel prices by a total PS per liter. And with the
‘ongoing crisis in the Middle East, prices may still rise,

While it may be true that there are factors that contro! the prices of oil in the
world market which the Philippine oil companies cannot control, it also cannot be
argued that these oil companies are reaping the benefits in the form of billions of
Pesos in revenues and income.

Petron Corporation reported that it returned to profitability after posting a net
income of P4.3 billion for the year 2009, and a net income of P1.9 billion for the 1st
quarter of the year 2010, Pilipinas Shell posted a P7.6 billion profit for the first three
quarters of 2009.

it is thus apparent that as gas prices go up, the income of these companies
also goes up. This just shows that as prices of oil world wide increase, these
companies also raise their profit margin. It may be argued therefore that if they fix
their profit margin at a certain level, even if the price of oll increase, the prices of gas
and diesel in the Philippines will not increase but the income of these companies will
decrease.

The way these oil companies peg the price of gas and diesel is very unclear
to the public because they do not expiain fo the pubiic how they arrive at a price per
liter. Therefore, in order to ensure that the public is not victimized by these
companies anymore, they should be required to disclose to the public step by step
how they arrive at the prices of gasoline and diesel per liter. This way, the public is


informed and these oil companies can be held accountable to the public if there are
unconscionable profits being eamed by these oil companies at the expense of the
Filipino people who are made to bear the hardships that high prices bring.

Also, these oil companies must disclose to the public a more detailed report of
their operations. At present, oil companies are only required to inform the
Department of Energy (DOE) of any impending adjustment in their prices hours
before implementation without disclosing their inventory levels. This is very
convenient for these oil companies because they could sell oil that they purchased at
lower prices al current prices and make a killing at the expense of the consuming
public.

DOE secretary Jose Rene Almendras said that, “we cannot just depend on
the data of the cil companies. The DOE wilt have to know the level of their inventory.
If we will be able to determine their import declaration, then we will also know their
inventory. We will have a better position given that data to determine pricing’.

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

RUFYS B. Rt IGUEZ

wnt ices, JR


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

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

House Bit No,_ 2416

AN ACT
MANDATING OIL COMPANIES IN THE PHILIPPINES TO DISCLOSE TO THE
PUBLIC A DETAILED REPORT OF THEIR OPERATIONS AND A
COMPREHENSIVE CALCULATION OF HOW THEY ARRIVE AT THE PRICE OF
GAS AND DIESEL PRODUCTS PER LITER

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

SECTION 1. It is hereby mandated that oil companies operating in the Philippines
should submit to the Department of Energy (DOE) and disclose to the public a very
detailed and comprehensive report on their operations on a monthly basis.

This report shall include, but not be limited to, the amount of oil they import
per month and at what prices, the amount of oil they sold, their revenue and
expenses, their net income, and all other pertinent data as may be required by the
DOE.

This report shall be submitted to the DOE on a monthly basis for the DOE to
properly monitor the pricing of oil in the country.

SECTION 2. Oil companies are also mandated to submit to the DOE and report to
the public how they come up with the price of gas and diesel per liter. They are
required to show a detailed calculation, including how much they eam per liter, to the
pubic.

SECTION 3. Implementing Rules and Regulations (IRR). - The DOE shalt
promulgate the IRR necessary for the implementation of this Act.

SECTION 4, Repealing Clause. - Any law, presidential decree or issuance, executive
order, administrative rule or regulation contrary to or inconsistent with the provisions
of this Act is hereby repealed, modified or amended accordingly.

SECTION 5. Separability Ciause. - If any of the provision of this Act is held
unconstitutional or invalid, the remainder of the Act or the provision not otherwise
affected shall remain valid and subsisting.

SECTION 6, Effectivity Clause. - This Act shall take effect thirty (30) days after its
publication in two (2) newspapers of general circulation,

Approved,