FOURTEENTH CONGRESS OF THE REPUBLIC) 
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!It.>, 
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OF THE PHILIPPINES 
First Regular Session 
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Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The series of oil price hikes has led to public clamor for the review of Republic 
Act No. 8479, otherwise known as the Downstream Oil Industry Deregulation Law of 
1998. Upon the directive of President Gloria Macapagal Arroyo, the Department of 
Energy created an Independent Review Committee (IRC) consisting of professionals 
from the private sector who are respected in their fields, to review and assess whether the 
Oil Deregulation Law bas been effective and whether it has attained its goals under the 
prevailing economic circumstances and conditions in the country. 
Among the findings of the IRC, effective enforcement of the law is the key issue. 
The reported malpractices and illegal activities, such as substandard service stations and 
petroleum product smuggling demoralize legitimate investors. It is in this area where it is 
believed most of the problems arise. 
Deregulation of the oil industry does not necessarily mean absence of any form of 
government intervention. It is consistent with the government’s mandate to supervise the 
industry and regulate those aspects where market forces may not operate satisfactorily 
and thus more active intervention may be justified to ensure a truly competitive market, 
under a regime of fair prices, and adequate and continuous supply of environmentally 
clean and high-quality petroleum products. 
The IRC finds that jurisdiction over the oil industry is spread out to many 
government agencies under Executive Order No. 377 (Providing the Institutional 
Framework for the Administration of the Deregulated Downstream Oil Industry), which 
makes coordination and enforcement very difficult, with each agency trying to protect 
one’s turf. 


Thus, enforcement of laws, rules and regulations is one of the critical issues in 
monitoring the downstream sector particularly in the retailing of LPG and Liquid Fuels. 
Removing certain powers from the DOE, under Republic Act No. 8479 has led to 
the proliferation of illegal, unsafe, unfair practices in the LPG and liquid fuel (“bote- 
bote”) sectors of the oil industry, especially in the retailing sector. 
Most of the players favor reinstatement and even strengthening of the DOE’s 
authority to register and issue certifications for qualified industry participants so that the 
DOE can effectively enforce compliance with rules and regulations on product quality, 
facility standards, and safety. 
This bill, therefore, seeks to provide definitive rules and regulations to restore the 
DOE’s authority and police power to suspend operations and revoke licenses of violators 
and erring players in the industry in the context of a deregulated environment.* 
* As a result of a public hearing and consultations during the 13” Congress, this is the DOE-proposed 
substitute bill that seeks to amend Republic Act No. 8479. 


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FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
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S E N A T E  
S.No. 1940 
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Introduced by Senator Miriam Defensor Santiago 
AN ACT 
AMENDING REPUBLIC ACT NO. 8479, OTHERWISE KNOWN AS THE 
“DOWNSTREAM OIL INDUSTRY DEREGULATION ACT OF 1998”. 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 5 of Republic Act No. 8479 is hereby amended to read as follows: 
Section 5. Liberalization of the Indushy. - Any law to the contrary 
notwithstanding, any person or entity may import or purchase any quantity of 
crude oil and petroleum products from a foreign or domestic source, lease or own 
and operate refineries and other downstream oil facilities and market such crude 
oil and petroleum products either in a generic name or his or its own trade name, 
or use the same for his or its own requirement: Provided, That any person [who 
shall] ENGAGED OR INTENDING TO engage in any such activity shall give 
prior notice thereof to the DOE for monitoring purposes AND SHALL FIRST 
SECURE A CERTIFICATE OF COMPLIANCE (COC) .OR, FOR LPG- 
RELATED ACTIVITIES, A STANDARD COMPLIANCE CERTIFICATE 
(SCC) FROM THE DOE: Provided, further, That [such notice] THE 
ISSUANCE OF SAID COClSCC shall NOT exempt such person or entity kom 
securing certificates of quality, health and safety and environmental clearance 
from the proper governmental agencies: Provided, jkrfhermore, That such person 
or entity shall, for monitoring purposes, report to the DOE his or its every 
importatiodexportation: Provided, $nally, That all oil importations shall be in 
accordance with the Base1 Convention. 
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SECTION 2. Section 14 of Republic Act No. 8479 is hereby amended to read as follows: 
Section 14. Monitoring AND ENFORCEMENT M E C M I S M S .  - 
(A) CERTIFICATE OF COMPLIANCEISTANDARD COMPLIANCE 
CERTIFICATE - THE COClSCC PROVIDED UNDER SECTION 5 
HEREOF SHALL BE A MANDATORY REQUIREMENT FOR THE 
GRANT OR RENEWAL OF ANY LOCAL GOVERNMENT LICENSE OR 
PERMIT (LE. BUSINESSIMAYOR’S PERMIT) TO ENGAGE IN ANY 
ACTIVITY IN THE DOWNSTREAM OIL INDUSTRY. NO BUSINESS 
PERMIT SHALL BE ISSUED OR RENEWED WITHOUT FIRST 
SECURING COC/SCC FROM THE DOE. 
THE COClSCC SHALL 
INDICATE THAT THE PERSONENTITY APPLYING THEREFOR HAS 
COMPLIED WITH THE SUBMISSION OF ALL INFORMATION 
REQUIRED UNDER PERTINENT DOE CIRCULARS AND GUIDELINES 
AND 
SHALL 
STATE 
THAT 
THE 
FACILITIES 
OF 
SAID 
PERSONENTITY 
WAS 
SUBJECTED 
TO 
AND 
PASSED 
THE 
INSPECTION, BACKGROUND INVESTIGATION AND EVALUATION 
OF EQUIPMENT, PRODUCTS AND FACILITIES TO ENSURE 
COMPLIANCE WITH STANDARDS ON QUALITY, HEALTH, SAFETY 
AND 
ENVIRONMENTAL 
PROTECTION. 
THE 
SCC 
FOR 
PERSON/ENTITY INVOLVED IN THE RETAILING OF LPG SHALL 
INCLUDE THE SPECIFIC BRANDlS A RETAILER IS ALLOWED TO 
SELL AS PROVIDED FOR IN THE CERTIFICATION SUBMITTED BY 
THE BRAND OWNERS TO THE DOE. 
THE DOE SHALL NOT ISSUE OR RENEW ANY COC/SCC IF, 
BASED ON ITS RECORDS, THE APPLICANT IS SUBJECT OF A 
COMPLAINT OR CASE FILED FOR NON-COMPLIANCE OF THE 
PROVISIONS OF THIS ACT AND RULES AND REGULATIONS ISSUED 
BY THE DOE IN RELATION THERETO, UNLESS SUCH COMPLAINT 
OR CASE HAS BEEN DISMISSED OF COMPLETELY RESOLVED 
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THROUGH 
THE 
PAYMENT 
OF 
THE 
CORRESPONDING 
ADMINISTRATIVE FINES OR PENALTIES, AMONG OTHERS, 
PROVIDED, FURTHER, THAT THE DOE SHALL R E V O m  A COC/SCC 
AND DISQUALIFY FOR ISSUANCE OF NEW COC/SCC ANY 
PERSON/ENTITY FOUND TO HAVE COMMITTED THE SAME 
VIOLATION AT LEAST THREE (3) TIMES WITHIN A PERIOD OF 
TWELVE (12) SUCCEEDING MONTHS, REGARDLESS OF THE 
PAYMENT OF THE CORRESPONDING ADMINISTRATIVE FINE OR 
PENALTY FOR EACH VIOLATION. 
THE COC SHALL BE VALID FOR FIVE (5) YEARS AND THE 
SCC SHALL BE VALID FOR ONE (1) YEAR FROM THE DATE OF 
ISSUANCE THEREOF, UNLESS SOONER REVOKED OR SUSPENDED. 
THE REVOCATION OR SUSPENSION OF A COClSCC SHALL BE A 
GROUND FOR THE REVOCATION AND/OR SUSPENSION BY THE 
LGU CONCERNED OF THE PERMIT AND OPERATION OF ERRING 
PERSON/ENTITY. 
(B) MONITORING AND STANDARDS COMPLIANCE INSPECTION 
- THE DOE, BY ITSELF OR IN PARTNERSHIP WITH OTHER 
CONCERNED 
GOVERNMENT 
AGENCIES, 
SHALL 
CONDUCT 
REGULAR MONITORING AND INSPECTION OF PERSON/ENTITY 
INVOLVED IN THE DOWNSTREAM OIL ACTIVITIES TO ENSURE 
THAT CLEAN, ENVIRONMENTALLY-SAFE AND WORKER-BENIGN 
TECHNOLOGIES ARE APPLIED AND TO ENSURE CONFORMITY 
WITH 
QUALITY 
AND 
SAFETY 
STANDARDS 
AND 
OTHER 
MANDATORY REQUIREMENTS OF THE LAW. THE DOE SHALL 
NOT ISSUE COClSCC UNLESS IT IS SHOWN UPON PROPER 
CONDUCT OF STANDARD COMPLIANCE INSPECTION, THAT THE 
PERSON/ENTITY 
ENGAGED 
IN 
THE 
DOWNSTREAM 
OIL 
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ACTlVITIES HAS COMPLIED WITH THE PROVISIONS OF THIS ACT, 
THE PNS ON PETROLEUM PRODUCTS AND FACILITIES AND SUCH 
OTHER RULES AND REGULATIONS AS MAY BE PRESCRIBED BY 
THE DOE. 
SPECIFIC TO THE LPG SECTOR, THE DOE 
SHALL 
CONFISCATE CYLINDERS FOUND TO BE IN VIOLATION OF RULES 
AND REGULATIONS ON SAFETY, MEASUREMENT OR VOLUME 
STANDARDS, 
MARKINGS 
AND 
RELATED 
MATTERS 
(LE. 
UNDERFILLED, 
UNBRANDED, 
POSSESSION 
OF 
TAMPERED, 
ALTERED OR MODIFIED LPG CYLINDERS, AND THE LIKE) AND 
SHALL FILE NECESSARY ADMINISTRATIVE AND/OR CRIMINAL 
CHARGES IN COOPERATION WITH CONCERNED GOVERNMENT 
AGENCIES. 
THE 
DOE 
SHALL 
FORMULATE 
RULES, 
IN 
CONSULTATION WITH INDUSTRY PARTICIPANTS, FOR THE 
DISPOSITION OF CONFISCATED, SEIZED AND IMPOUNDED LPG 
CYLINDERS. 
THE DOE SHALL REQUIRE PERSON/ENTITY ENGAGED IN 
THE DOWNSTREAM OIL ACTIVITIES TO REGULARLY SUBMIT 
INFORMATION SUCH AS, BUT NOT LIMITED TO, NATURE OF 
BUSINESS, TRADE NAME/BRAND NAME OWNERS, LIST AND 
ADDRESS OR LOCATION OF FACILITIES AND EQUIPMENT AND 
SUCH 
OTHER 
RELEVANT 
INFORMATION 
AS 
MAY 
BE 
DETERMINED BY THE DOE. 
THE DOE SHALL ESTABLISH A 
CENTRAL DATABASE WITH ONE (1) YEAR FROM EFFECTIVITY OF 
THIS ACT. THE DOE SHALL MAINTAIN THE DATABASE AND 
UPDATE THE SAME ON A QUARTERLY BASIS. THE DATABASE 
SHALL BE MADE AVAILABLE TO THE PUBLIC UPON REQUEST, 
SUBJECT TO THE LIMITATIONS PROVIDED IN SECTION 15 (G) OF 
THIS ACT AND THE APPROVAL OF THE DOE. 
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(C) REPORTS AND DISCLOSURE TO DOE - THE DOE SHALL 
HAVE THE AUTHORITY TO REQUIRE ANY PERSON/ENTITY 
ENGAGED IN THE DOWNSTREAM OIL ACTIVITIES TO SUBMIT 
WRITTEN, ELECTRONIC OR OTHER FORM OF REPORTS OR 
DISCLOSURES, AS MAY DEEM REASONABLE AND NECESSARY TO 
EFFECTIVELY PERFORM THEIR FUNCTIONS UNDER THIS ACT. 
ANY PERSON/ENTITY WHO FAILS TO SUBMIT ANY SUCH REPORT 
OR DISCLOSURE WITHIN THE PERIOD AND IN THE MANNER 
PRESCRIBED BY THE DOE SHALL BE PENALIZED UNDER THIS 
ACT. 
(D) MONITORING OF DOPKVSTREAM OIL INDUSTRY ACTIPZTY 
- 
(I) 
[(a)] The DOE shall monitor and publish daily international crude oil 
prices, as well as follow the movements of domestic oil prices. FOR THIS 
PURPOSE, THE GENERAL APPROPRIATIONS ACT (GAA) SHALL 
PROVIDE FOR THE DOE SUCH FUNDS, BUDGET OR ALLOCATION 
FOR THE DOE’S SUBSCRIPTION TO INTERNATIONAL OIL PRICE 
WIRE SERVICES. It shall likewise monitor the quality of petrolenm products 
and stop the operation of businesses involved in the sale of petroleum products 
which do not comply with the national standards of quality that are aligned with 
the INTERnational standards/protocols of quality. The Bureau of Product 
Standards 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 fueI 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. 
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(11) [(b)] The DOE shall monitor the refining and manufacturing processes 
of local petroleum products to ensure that clean and safe (environment and 
worker-benign) technologies axe applied. This shall also apply to the process of 
marketing local and imported petroleum products. FOR THIS PURPOSE, THE 
GAA SHALL FURTHER PROVIDE FOR ADDITIONAL BUDGETARY 
SUPPORT 
TO 
THE 
DOE 
FOR 
THE 
ACQUISITION 
AND 
MAINTENANCE 
OF 
THE 
APPROPRIATE 
MOBILE 
TESTING 
FACILITIES AND EQUIPMENT. 
011) [(c)] The DOE shall maintain a periodic schedule of present and 
future total industry inventory of petroleum products for the purpose of 
determining the level of supply. To implement this, the importers, refiners, and 
marketers are hereby required to submit monthly to the DOE their actual 
importations, local purchases, sales and/or consumption, and inventory on a per 
crudelproduct basis. 
(IV) [(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 the DOE-DOJ Task Force is hereby mandated to determine within 
thirty (30) days the merits of the report and initiate the necessary actions 
warranted under the circumstance: Provided, That nothing herein shall prevent the 
said task force from investigating and/or filing the necessary complaint with the 
proper court or agency motu propio. 
Upon the effectivity of this Act, the Secretaries of Energy and Justice shall 
jointly appoint the members of a committee who shall be tasked with the drafting 
of the rules and guidelines to be adopted by the Task Force in the performance of 
its duty. These guidelines shall ensure the efficiency, promptness, and 
effectiveness in the handling of its cases. The Task Force shall be organized and 
its members appointed within one (1) mouth from the effectivity of this Act. 
(V) [(e)] In times of national emergency, when the public interest so 
requires, the DOE may, during the emergency and under reasonable terms 
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prescribed by it, temporarily take over or direct the operation of any person or 
entity engaged in the Industry. 
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SECTION 3. Section 15 of Republic Act No. 8479 is hereby amended to read as follows: 
Section 15. Additional Powers of the DOE Secretary. - In connection 
with the enforcement of this Act, the DOE Secretary shall have the following 
powers: 
(a) To gather and compile appropriate information concerning, and to 
investigate from time to time the organization, business, conduct, practices, and 
management of any person or entity in the Industry; 
(b) To require, by general or special orders, persons or entities engaged in 
a particular activity of the industry: (i) to file an annual or special report, or both 
in such form as the Secretary may prescribe, or (ii) to answer specific questions in 
writing, furnishing to the Secretary such information as he may require as to the 
organization, business, conduct, practices, management, and relation to other 
corporations, partnerships, and individuals of the respective persons or entities 
filing such reports or answer. Such reports andor answer shall be filed with the 
Secretary under oath and within such reasonable time as the Secretary may 
prescribe; 
(c) Upon the direction of the President or either House of Congress, to 
investigate and report the facts relating to any alleged violation of this Act by any 
person or corporation; 
(d) Upon the application of the Secretary of Justice, to investigate and 
make recommendations for the readjustment of the business of any person or 
entity alleged to be violating this Act in order that such person or entity may 
thereafter maintain his or its organization, management, and conduct of business 
in accordance with law; 
(e) [To recommend to the proper government agency the suspension or 
revocation and termination of the business permit of an offender;] FOR ANY 
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VIOLATION OR NON-COMPLIANCE WITH THIS ACT OR SUCH 
RULES AND REGULATIONS ISSUED BY THE DOE IN RELATION 
THERETO, TO IMPOSE AND COLLECT ADMINISTRATIVE FINES 
AND PENALTIES WHICH SHALL RANGE FROM A MINIMUM OF 
TEN THOUSAND PESOS (PHP 10,000.00) TO A MAXIMUM OF FIVE 
HUNDRED 
THOUSAND PESOS 
(PHP 
500,000.00) 
FOR 
EACH 
VIOLATION OR NON-COMPLIANCE, REVOKElSUSPEND A COC/SCC 
AND 
CAUSE CORRESPONDING ACTION BY LGU ON THE 
SUSPENSION OR REVOCATION AND TERMINATION OF THE 
BUSINESS PERMIT OR LICENSE OF AN OFFENDER, PROVIDED 
THAT, THE ADMINISTRATIVE FINE OR PENALTY THAT MAY BE 
IMPOSED BY THE DOE SHALL BE WITHOUT PREJUDICE TO THE 
FILING OF ANY CRIMINAL ACTION, IF WARRANTED UNDER THE 
CIRCUMSTANCES; 
(f) Concomitant with the policy of ensuring a continuous, adequate and 
economic supply of energy to exercise his powers and functions provided under 
Section 5 (c) of Republic Act No. 7638; 
(g) To make public from time to time such portions of the information 
obtained by him hereunder as are in the public interest; and to make annual and 
special reports to Congress and to submit therewith recommendations for 
additional legislation; and to provide for the publication of his reports and 
decisions in such form and manner as may be best adapted for public information 
and use: Provided, That the Secretary shall have any authority to make public any 
trade secret or any commercial or financial information which is obtained from 
any person or entity which is privileged or confidential, except that the Secretary 
may disclose such information to officers and employees of appropriate law 
enforcement agencies or to any officer or employee of any such law enforcement 
agency upon the prior certification by an officer of any such law enforcement 
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agency that such information will be maintained in confidence and will be used 
only for official law enforcement purposes; [and] 
(h) Whenever a final order has been entered against any defendant in any 
suit brought by the government to prevent and restrain any violation of the anti- 
trust provisions of this Act to make investigation, upon his initiative, of the 
manner in which the decree has been or is being carried out, and upon the 
application of the Secretary of Justice, it shall be his duty to make such 
investigation. He shall transmit to the Secretary of Justice a report embodying his 
findings and recommendations as a result of any such investigation, and the report 
shall be made public at the discretion of the Secretary; AND 
(I) PERFORM SUCH OTHER POWERS AND FUNCTIONS AS 
MAY BE NECESSARY IN FURTHERANCE OF THE OBJECTIVES OF 
THIS ACT. 
SECTION 4. Separability Clause. - If any provision of this Act is held invalid or 
unconstitutional, the remainder of the Act or the provision not otherwise affected shall remain 
valid and subsisting. 
SECTION 5 .  Eflectivity CIause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved, 
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