FIFTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES
FIRST REGULAR SESSION

HOUSE OF REPRESENTATIVES

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

2569

House Bill No.

EXPLANATORY NOTE

Republic Act (RA) No. 8479, othenwise 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 oil supply from the
dominant oil companies which dictate the prices of oil. 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 oil industry and re-establish
the Oil Price Stabilization Fund (OPSF).

By repealing RA 8479, the oil industry will then be again regulated by
the goverment. 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 as a whole.

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

i

RUFUS B. ROPRIGUEZ

Ys

MAXIMO B. RODRIGUEZ, 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.

2569

House Bill No.

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 2010.”

SEC. 2. Declaration of Policy. - \t is hereby declared the policy of the
State to regulate the oil 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 Oif 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;


() “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

(g) “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. Oil 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 (15%) 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


() 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