, ' 
SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
) 
SENATE 
S.NJ.-214 
Introduced by Senator Ralph G, Recto 
Explanatory Note 
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"13 
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Republic Act (R.A,) No. 8479, otherwise known as thy "Downstream Oil Industry 
Deregulation Act of 1998" was enacted to liberalize and deregulate the downstream oil industry to 
ensure a truly competitive market under a regime of fair prices, adequate and continuous supply of 
environmentally-clean and high-quality petroleum products. Under the law, the government can no 
longer interfere with the pricing of oil products except to monitor which also means that it is freed 
from providing costly subsidies. 
However, R.A. No. 8479 failed to mitigate the effects of a global oil crisis. Worse, it 
appeared that the deregulation policy even strengthened the cartelization of oil industry players since 
automatic oil price hikes are allowed without control from the government. 
Frequent oil price hikes aggravated the hardships of the public consisting of the consumer, 
agriculture, manufacturing and service sectors. Thus, people's organizations have been demanding 
for a review of R.A. No. 8479. These groups have consistently raised concerns on whether 
international price movements were accurately considered in the pricing of petroleum products. It is, 
therefore, incumbent upon the government to ensure transparency in the pricing of petroleum 
prodl\cts by the )ocal, oil industlY players and ,to determine the computations or assumptions 
employed in their price adjustments to prevent oil companies from engaging in unwarranted 
profiteering. 
To achieve this purpose, this measure shall require the submission of financial documents of 
local oil companies that are pertinent in the determination of price adjustments of petroleum 
products. Submission of these documents is mandatory and penalties for non-compliance are 
increased. 
This bill also declares unlawful for oil companies to engage in unwarranted oil price 
increases, or unreasonable amounts of price increase or decrease as may be detelmined by the DOE 
and provides for the imposition of heavier penalties against erring oil companies and officials. 
To strengthen the Task Force created under Section 14 of the law, which is tasked to 
investigate and file complaints against unreasonable rise in the prices of petroleum products, this bill 
seeks the inclusion of the Commission on Audit (COA) and consumer and public transport group, in 
the Task Force together with the Departments of Energy, Justice and Trade and Industry. The COA, 
with its auditing and accounting expertise, will fortify the capability of the Task Force in scrutinizing 
the financial documents and repotts ofthe oil companies. 
Finally, to provide Filipinos the best energy choices and to ensure transparency in the pricing 
of oil products, the Task Force is mandated to post twice a month on the DOEs official website and 
publish in at least 2 national newspapers the prevailing price of petroleum products in the retail 
market. 
With the foregoing considered, the approval of this bi 


SIXTEENTH CONGRESS OF THE 
) 
',j\'in~t 
tjfi~' uf 1I!<,;)!.t."l.r,' • 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
) 
'13 
AUG -6 A10 ;11 
SENATE 
S.No. 1214 
Introduced by Senator Ralph G. Recto 
AN ACT 
TO PROMOTE FAIR TRADE IN THE OIL INDUSTRY AND FOR OTHER PURPOSES, 
AMENDING REPUBLIC 
ACT 
NO. 
8479, 
OTHERWISE 
KNOWN 
AS 
THE 
"DOWNSTREAM OIL DEREGULATION ACT OF 1998" 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. Section 4 of RepubJic Act No. 8479 is hereby amended to read as follows: 
2 
"SEC. 4. Definition of Terms. - For purposes of this Act, the following terms are 
3 
herein below defined: 
4 
"x x x 
5 
(0) PREVAILING RETAIL PRICE SHALL REFER TO THE CURRENT 
6 
RETAIL PRICE OF ALL PETROLEUM PRODUCTS IN THE COUNTRY, 
7 
[(0)] (P) Singapore Import Parity (SIP) shall refer to the deemed landed cost of a 
8 
petroleum product imported from Singapore at a free-on-board price equal to the average 
9 
Singapore Posting for that product at the time ofloading; 
10 
[(p)] (Q) Singapore Posting shall refer to the price of petroleum products 
11 
periodically posted by oil refineries in Singapore and reported by independent 
12 
international publications; 
13 
(R) TASK FORCE SHALL REFER TO THE OIL MONITORING TASK 
14 
FORCE CREATED UNDER SECTION 2 OF THIS ACT; 
15 
[(q)] (S) Wholesale Posted Price (WPP) shall refer to the ceiling price of 
16 
petroleum products set by the Board based on its duly approved automatic pricing 
17 
formula. 
18 
SEC. 2. Creation of the Oil Monitoring Task Force. - The Oil Monitoring Task Force 
19 
shall be organized within one (I) month from the effectivity of this Act to implement the Anti-
20 
Trust safeguards under Section 11 of Republic Act No. 8479 and ensure fair competition in the 
21 
oil industry. 
,22 
I) Creation and Composition. - The Secretaries from the Departments of Energy 
23 
(DOE), Justice (DOJ) and Trade and Industry (DTI) and the Chairman of the 
24 
Commission on Audit (COA) shall jointly appoint the 'members of the Task 
Page 1 of 5 


1 
Force which shall be composed of an Undersecretary from Energy and Justice, as 
2 
Co-Chair with the following members: 
3 
a) One (1) member from the DOE; 
4 
b) One (1) member from the DOJ; 
5 
c) One (1) member from the DTI; 
6 
d) One (1) member from COA; 
7 
e) Two (2) members from the consumer and public transport groups which have 
8 
been in existence and active for the last five (5) years prior to this Act; and 
9 
f) One (1) industry financial expert. 
10 
2) The members of the Task Force shall adopt its rules and guidelines in the 
11 
performance of its duty. These guidelines shall ensure the efficiency, promptness, 
12 
and effectiveness in the handling of its cases. 
13 
SEC. 3. Powers and Functions of the Oil Monitoring Task Force. -
14 
a) 
To establish stricter and more industry-specific reporting guidelines; 
15 
b) 
To conduct periodic and unannounced inspections of oil depots and 
16 
17 
18 
19 
20 
21 
22 
facilities; 
c) 
To inspect the books of accounts of companies engaged in the oil 
industry; 
d) 
To request all records that are deemed necessary to ensure 
transparency and compliance of all oil industry participants with the 
provisions of this act; and 
e) 
To conduct an annual analysis of oil industry performance, including 
23 
findings and issues encountered by the Task Force to be posted in 
24 
the DOE website. 
25 
SEC. 4. Section 10 of Republic Act No. 8479 is hereby amended to read as follows: 
26 
"SEC. 10. Promotion of Retail Competition. 
THE TASK FORCE SHALL 
27 
ADOPT ALL MEASURES TO PROMOTE FAIR TRADE IN THE RETAIL MARKET 
28 
AND THE CONSUMERS' RIGHT OF ACCESS TO ANY AND ALL INFORMATION 
29 
REGARDING THE PRICE OF ALL PETROLEUM PRODUCTS IN THE RETAIL 
30 
MARKET. THE TASK FORCE SHALL CONTINUE TO MONITOR THE 
31 
MOVEMENT OF OIL PRICE IN THE RETAIL MARKET AND POST THE 
32 
PREVAILING RETAIL PRICE ON THE DOE'S OFFICIAL WEBSITE AND 
33 
PUBLISH THE SAME IN AT LEAST TWO (2) NATIONAL NEWSPAPERS OF 
34 
GENERAL CIRCULATION ON A BIWEEKLY BASIS. THESE PRACTICES ARE 
35 
INTENDED TO PROVIDE THE CONSUMERS WIDER ACCESS TO PETROLEUM 
36 
PRODUCTS THAT GIVE BEST VALUE FOR MONEY." 
37 
"XXX 
38 
"X X X 
Page 2 of 5 


1 
"XXX 
2 
"X XX 
3 
"X X X." 
4 
SEC. 5. Section 11 of Republic Act No. 8479 is hereby amended to read as follows: 
5 
"Sec. 11. Anti-Trust Safeguards. To ensure fair competition and prevent cartels 
6 
and monopolies in the Industry, the following acts are hereby prohibited: 
7 
"(a) XXX 
8 
"(b) X X X 
9 
"Any person, including but not limited to the chief operating officer, chief 
10 
executive officer or chief finance officer of the partnership, corporation or any entity 
11 
involved, who is found guilty of MY of the said prohibited acts shall suffer the penalty of 
12 
three (3) to seven (7) years imprisonment, and a fine ranging from [One million pesos (P 
13 
1,000,0000.00) to) Two million pesos (P·2,000,000.00) TO THREE MILLION PESOS 
14 
(P 3,000,000.00). 
15 
SEC. 6. Section 12 of Republic Act No. 8479 is hereby amended to read as follows: 
16 
"Sec. 12. Other Prohibited Acts. To ensure compliance with the provisions of this 
17 
Act, the refusal to comply with any of the following shall likewise be prohibited: 
18 
"(a) Submission of any reportorial requirements SUCH AS BUT NOT LIMITED 
19 
TO BOOKS OF ACCOUNTS, AUDITED FINANCIAL STATEMENTS, VERIFIED 
20 
REPORTS OF THE COMPANY'S ASSUMPTIONS AND COMPUTATIONS IN THE 
21 
PRICING OF THEIR PETROLEUM PRODUCTS, WHETHER IN THE PROCESSING, 
22 
REFINING, SALE OR DISTRIBUTION OF SAID PRODUCTS, RELEVANT TO 
23 
ENSURE THAT OIL COMPANIES ARE NOT INVOLVED IN UNWARRANTED 
24 
PROFITEERING; 
25 
"(b) X X X; 
26 
"(c) X X X; 
27 
"(d) X X X. 
28 
"Any person, including but not limited to the chief operating officer or chief 
29 
executive officer of the partnership, corporation or any entity involved, who is found 
30 
guilty of any of the said prohibited acts shall suffer the penalty of imprisonment for two 
31 
(2) years and a fine ranging from [Two hundred fifty thousand pesos (P 250,000.00) to] 
32 
Five hundred thousand pesos (P 500,000.00) TO SEVEN HUNDRED FIFTY 
33 
THOUSAND PESOS (P 750,000.00). 
34 
IT SHALL LIKEWISE BE UNLAWFUL TO CAUSE THE UNNECESSARY 
35 
INCREASE 
IN 
THE PRICES 
OF PETROLEUM PRODUCTS, OR CAUSE AN 
36 
UNREASONABLE AMOUNT OF INCREASE .OR DECREASE IN THE SAME UNDER 
37 
SECTION 7 OF THIS ACT. 
38 
SEC. 7. Section 14 of Republic Act No. 8479 is hereby amended to read as follows: 
Page 3 of 5 


" 
1 
"SEC. 14. MONITORING. (a) The DOE shall monitor ACTIVELY and publish 
. 2 
daily international crude oil prices, as well as follow the movements of domestic oil 
3 
prices. IT SHALL DETERMINE THE FACTORS WHICH CAUSE THE CHANGE IN 
4 
THE PRICES OF PETROLEUM PRODUCTS, EVALUATE THE NECESSITY OF 
5 
THE CHANGE IN THE PRICES AND THE REASONABILITY OF THE AMOUNTS 
6 
OF INCREASE OR DECREASE BASED ON THE ACTUAL CONDITIONS OF THE 
7 
MARKET AND OTHER CAUSATIVE AND CONTRIBUTORY FACTORS AS 
8 
DETERMINED BY IT. It shall likewise monitor the quality of petroleum products and 
9 
stop the operation of businesses involved in the sale of petroleum products which do not 
10 
comply with the national standards of quality that are aligned with the national 
11 
standards/protocols of quality. The Bureau of Product Standards of the DTI, together with 
12 
the Department of Environment and Natural Resources (DENR), the DOE, the 
13 
Department of Science and TeChnology (DOST), representatives of the fuel and 
14 
automotive industries and the consumers, shall set the specifications for all types of fuel 
15 
and fuel-related products to improve fuel composition for increased efficiency and 
16 
reduced emissions. The BPS shall also specify the allowable content of additives in all 
17 
types of fuels and fuel-related products. 
18 
"(b) X X X 
19 
"(c) The DOE shall maintain a periodic schedule of present and future total 
20 
industry inventory of petroleum products for the purpose of determining the level of 
21 
supply FOR THE SUCCEEDING MONTH. To implement this, the importers, refiners, 
22 
and marketers are hereby required to submit [monthly] EVERY THIRD WEDNESDAY 
23 
OF THE MONTH to the DOE their FORTY FIVE (4S)-DAY INVENTORY of actual 
24 
impOJiations, local purchases, sales and/or consumption[, and inventory] on a per 
25 
crude/product basis. 
26 
"(d) Any report from any person of an unreasonable [rise] CHANGE in the prices 
27 
of petroleum products shall be immediately acted upon. For this purpose, the [creation of 
.28 
the DOE~DOJ] Task Force'is hereby mandated to determine within thirty (30) days the 
29 
merits of the report and initiate the necessary actions warranted under the circumstance: 
30 
Provided, That nothing herein shall prevent the said Task Force from investigating and/or 
31 
filing the necessary complaint with the proper court or agency motu propio. 
32 
[Upon the effectivity of this Act, the Secretaries of Energy and Justice shall 
33 
jointly appoint the members of a committee who shall be tasked with the drafting of the 
34 
rules and guidelines to be adopted by the Task Force in the performance of its duty. 
35 
These guidelines shall ensure the efficiency, promptness, and effectiveness in the 
36 
handling of its cases. The Task Force shall be organized and its members appointed 
37 
within one (1) month from the effectivity ofthis Act.] 
Page 4 of 5 


1 
"(e) In times of national emergency, when the public interest so requires, the DOE 
2 
may, during the emergency and under reasonable terms prescribed by it, temporarily take 
3 
over or direct the operation of any person or entity engaged in the Industry. 
4 
SEC. 8. Implementing Rules and Regulations.- The Department of Energy, in 
5 
coordination with the Departments of Justice and Trade and Industry, the Commission on Audit 
6 
and representatives from the consumer and transport groups, shall formulate and issue the 
7 
necessary rules and regulations within sixty (60) days from the effectivity of this Act. 
8 
SEC. 9. Separability Clause.- If any provision of this Act is declared unconstitutional or 
9 
invalid, other parts or provisions hereof that are not affected thereby shall continue to be in full 
10 
force and effect. 
11 
SEC. 10. Repealing Clause. - All other laws, orders, issuances, circulars, rules and 
12 
regulations or parts thereof, which are inconsistent with the provisions of this Act are hereby 
13 
repealed or modified accordingly. 
14 
SEC. 11. Effectivity. This Act shall take effect fifteen (15) days from the date of 
15 
publication in the Official Gazette or in at least two (2) newspapers of general circulation. 
Approved, 
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