SEVENTEENTH CONGRESS _) i” RECEIVED

REPUBLIC OF THE PHILIPPINES )

‘Second Regular Session ) p> CATE: 0.8 2018
TAME. e
HOUSE OF REPRESENTATIVES By. =
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Introduced by Representative Maximo B. Rodriguez, Jr. >
EX OY

House Bill No, 7088

EXPLANATORY NOTE

Oil companies in the Philippines have been increasing gas and diesel prices regularly
under the guise of rising oil prices in the world market.

While it may be true that there are factors that control 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 oil 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 explain to the public 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 at current prices and make a killing at
the expense of the consuming public.

The DOE said that, “we cannot just depend on the data of the oil companies. The
DOE will 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.

I

MAXIMO B. RODRIGUEZ, JR



SEVENTEENTH CONGRESS ——_).
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodriguez, Jr.

House Bill No.

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
assembled:

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 public.

SECTION 3. Implementing Rules and Regulations (IRR). - The DOE shall 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 Clause. - 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,