a ORIGINAL Copy

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

4ai

House Bill No.__

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

In May 27, 1992, Republic Act No. 7581, or the Price Act, was ordained with the
objective of ensuring the availability of basic necessities and prime commodities at
reasonable prices. This is without denying legitimate business a fair return on investment.
It was also to provide protection to consumers against hoarding, profiteering and cartels,
especially during periods of calamity, emergency, widespread illegal price manipulation
and other similar situations.

However, in its enumeration on what are basic necessities or prime commodities
‘one very important set of products was excluded. These are petroleum products such as
gasoline, diesel and liquefied petroleum products (LPG).

It is quite difficult to understand why petroleum products were not deemed, at that
time, to be either a basic necessity or a prime commodity. It may be conceded that
petroleum products may not be basic necessities. This is because we still can live without
them.

Definitely however, gasoline, diesel and LPG, are prime commodities. These
products are very important goods, similar to, if not more important than the following -
all classified as prime commodities, such as fresh fruits; flour; pork; beef and poultry
meat; noodles; toilet soap; fertilizer; pesticides; poultry feeds; poultry, swine and cattle:
paper; school supplies; nipa shingles; sawali; cement; GI sheets; hollow blocks; plywood;
batteries; electrical supplies; light bulbs; and all drugs.

Probably, the reason for the non-inclusion of petroleum products under the
coverage of the Price Act was because of the pending desire then of the government to
pass the Oil Deregulation Law, which was passed a few years later. Maybe, the
government then wanted to have as much competition as possible, and less, if not zero
regulation on the said industry. This is to encourage as many oil players or competitors as
possible. In such a very ideal scenario, the prices of petroleum products would surely
drop or be at very reasonable levels.

However, this pipe dream has tured into a nightmare.
Under the Oil Deregulation Law, the prices of petroleum products have not gone

down. Instead, the prices of fuel products have hit all time highs that it maybe the biggest
burden of consumers and the public in general.


There are now accusations of the biggest oil companies being in cartel, and
manipulating the prices of their products, to the detriment of the consumers.

The government has become helpless. It cannot even audit the books of oil
companies to determine whether or not there is profiteering.

This is because under the deregulated environment, there is no such thing as
profiteering. The oil companies can jack up their prices and only the dictates of their
conscience is their limit.

And, the people are likewise without any choice but to buy the fuel products. This
is even at unreasonably high prices. Why? This is because petroleum products are prime
commodities, if not basic necessities. We surely cannot live without it.

Under this draft legislation, petroleum products shall be listed as prime
commodities under the Price Act.

In such a case, it shall be become illegal for oil companies to engage in the price
manipulation of petroleum products. In sum, they cannot engage in the following illegal
practices:

1. Hoarding or the undue accumulation of fuel products beyond normal
inventory levels, and the refusal or failure to sell the same;

2. Profiteering or selling the petroleum products at a price grossly in excess of its
true worth; and,

3. Cartel, which is any combination of or agreement between two (2) or more
persons to artificially and unreasonably increase or manipulate its price.

During emergencies, calamities or similar situations, the President can
automatically freeze at prevailing prices or place under automatic price control fuel
prices.

If there is just an impending calamity, the threat of an emergency, prevalence or
widespread acts of illegal price manipulation, impendency of any event that causes
artificial and unreasonable increase, or the prevailing price of the fuel products has risen
to unreasonable levels, the Department of Energy (DOE) may recommend to the
President the imposition of a price ceiling. Petroleum products can now be subjected to
suggested retail prices (SRP).

Also, the Energy Secretary may compel oil companies to attend investigations,
get the testimony of witnesses, produce and inspect books, records, financial statements,
and such other documents. And, unlike before, if there is a finding of hoarding,
profiteering, cartel or any violation of the Price Act, then cases can be filed against the
petroleum companies.

As a country, we espouse capitalism. As much as possible, regulation is frowned
upon. We allow and encourage the market forces to work.

However, if market capitalism is no longer working, then government should be
allowed to step in. If the system is no longer working for the general good, then the
police power of government should be utilized.

The welfare of the general public should be foremost the foremost consideration.
If the prices of goods, especially those classified as basic necessities and prime
commodities, like gasoline, diesel and LPG, become unreasonably expensive, without


rationale or due to very debatable ratiocination, then the government should be allowed to
set the prices right and determine if there is abuse by the sellers of said fuel products.

Itis in this view that the immediate passage of the bill is earnestly sought.

Representative


“SECTION 3. Definition of Terms. — For purposes of this Act,

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

Bed

House Bill No.

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

AN ACT

PROVIDING PROTECTION TO CONSUMERS BY STABILIZING
PRICES OF PETROLEUM PRODUCTS DURING EMERGENCY
SITUATIONS, MANDATING ITS INCLUSION AS A PRIME
COMMODITY UNDER THE COVERAGE OF THE PRICE ACT,
AMENDING FOR THE PURPOSE PERTINENT PROVISIONS OF
REPUBLIC ACT NO. 7581, OTHERWISE KNOWN AS THE
PRICE ACT, AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. — This Act shall be known as the “Consumer Protection
Against Undue Price Increases of Petroleum Products Act of 2013”.

SECTION 2. Declaration of Policy. ~ it is hereby declared the policy of the State
to ensure the availability of prime commodities, which includes petroleum products, at
reasonable prices at all times without denying legitimate business a fair return on
investment. It is also a declared policy of the State to provide effective and sufficient
protection to consumers against profiteering and cartels with respect to the supply,
distribution and pricing of petroleum products, especially during periods of calamity,
emergency, widespread illegal price manipulation and other similar situations.

SECTION 3. Inclusion of the Department of Energy in the Implementing
Agencies of the Price Act. ~ Section 3, Subsection (3) of Republic Act No. 7581,

otherwise known as the Price Act is hereby amended to read as follows:


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“SECTION 3. Definition of Terms. — For purposes of this Act,
the term:

XXX

(3) "Implementing agency" means the department, agency or
office of the Government which has jurisdiction over a basic
necessity or prime commodity as defined in this Act, which
shall be:

XXX
(-) THE DEPARTMENT OF ENERGY, WITH
REFERENCE TO PETREOLEUM PRODUCTS.

Xxx”

SECTION 4. Petroleum Products as Basic Commodity under the Price Act. ~
Section 3, Subsection (8) of Republic Act No. 7581, otherwise known as the Price Act is
hereby amended to read as follows:

“SECTION 3. Definition of Terms. — For purposes of this Act,

the term:

(8) "Prime commodities” include fresh fruits; flour; dried
processed and canned pork; beef and poultry meat; dairy
products not falling under basic necessities; noodles; onions;
garlic; vinegar, patis; soy sauce; toilet soap; fertilizer;
pesticides; herbicides; poultry; swine and cattle feeds;
veterinary products for poultry, swine and cattle; paper; school
supplies; nipa shingles; sawali; cement; clinker; GI. sheets;
hollow blocks; plywood; plyboard; construction nails;
batteries; electrical supplies; light bulbs; steel wire; and all
drugs not classified as essential drugs by the Department of
Health; PETROLEUM PRODUCTS, INCLUDING
GASOLINE, DIESEL AND LIQUEFIED PETROLEUM

PRODUCTS (LPG);


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(2) XXX”

SECTION 5. Inclusion of the Department of Energy in the Price Coordinating
Council. — Section 11 of Republic Act No. 7581, otherwise known as the Price Act is
hereby amended to read as follows:

“SECTION 11. Price Coordinating Council. — There is
hereby created a Price Coordinating Council, hereinafter referred to as the
Council, to be composed of the following members:

“XXX

(13) THE SECRETARY OF ENERGY

XXX”

SECTION 6. Separability Clause. - \f any provision of this Act, or any parts
thereof, is declared unconstitutional, the same shall not affect the validity and effectivity
of the other portions.

SECTION 7. Repealing Clause. ~ To the extent inconsistent with this Act,
Republic Act No. 8479, or the Downstream Oil Industry Law is hereby amended. All
other laws, executive orders, presidential decrees, proclamations, rules, regulations,
issuances and enactments of parts thereof inconsistent with this Act are hereby repealed
or modified accordingly.

SECTION 8. Effectivity. - This Act shall take effect fifteen (15) days from its
complete publication in the Official Gazette of in a newspaper of general circulation in

the Philippines, whichever comes earlier.

APPROVED.