February 10, 1998

REPUBLIC ACT NO. 8479

AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY, AND FOR OTHER

PURPOSES

CHAPTER I
General Provisions
SECTION 1. Short Title. — This Act shall be known as the "Downstream Oil
Industry Deregulation Act of 1998."
SECTION 2. Declaration of Policy. — It shall be the policy of the State to
liberalize and deregulate the downstream oil industry in order to ensure a truly
competitive market under a regime of fair prices, adequate and continuous supply of
environmentally-clean and high-quality petroleum products. To this end, the State shall
promote and encourage the entry of new participants in the downstream oil industry,
and introduce adequate measures to ensure the attainment of these goals. cdrep

SECTION 3. Coverage. — This Act shall apply to all persons or entities

engaged in any and all the activities of the domestic downstream oil industry, as well as
persons or companies directly importing refined petroleum products for their own use.
SECTION 4. De nition of Terms . — For purposes of this Act, the following
terms are hereinbelow defined:
a) Basel Convention shall refer to the international accord which governs
the trade or movement of hazardous and toxic waste across borders;
b) Board shall refer to the Energy Regulatory Board;
c) BOI shall refer to the Board of Investments;
d) Crude Oil shall refer to oil in its natural state before the same has
been re ned or otherwise treated, but excluding water, bottoms,
sediments and foreign substances;
e) Dealer shall refer to any person, whether natural or juridical, who is
engaged in the marketing and direct selling of petroleum products to
motorists, end users, and other consumers;
f) DOE shall refer to the Department of Energy;
g) DOJ shall refer to the Department of Justice;
h) Downstream Oil Industry (DOI) or Industry shall refer to the business
of importing, exporting, re-exporting, shipping, transporting,
processing, re ning, storing, distributing, marketing and/or selling
crude oil, gasoline, diesel, lique ed petroleum gas (LPG), kerosene,
and other petroleum products;
i) Hauler shall refer to any person, whether natural or juridical, engaged in
the transport, distribution, hauling, and carriage of petroleum
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 products, whether in bulk or packed form, from the oil companies and
independent marketers to the petroleum dealers and other
consumers;
j) LPG Distributor shall refer to any person or entity, whether natural or
juridical, engaged in exporting, re lling, transporting, marketing,
and/or selling of LPG to end users and other consumers;
k) New Industry Participants shall refer to new participants in a
particular sub-sector of the downstream oil industry with investments
and initial business operations commencing after January 1, 1994;
l) Person shall refer to any person, whether natural or juridical, who is
engaged in any activity of the downstream oil industry;
m) Petroleum shall refer to the naturally occurring mixture of
compounds of hydrogen and carbon with a small proportion of
impurities and shall include 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 and/or other stratified mineral fuel deposits;
n) Petroleum Products shall refer to products formed in the course of
re ning crude petroleum through distillation, cracking, solvent re ning
and chemical treatment coming out as primary stocks from the
re nery such as, but not limited to: LPG, naphtha, gasolines, solvent,
kerosenes, aviation fuels, diesel oils, fuel oils, waxes and petrolatums,
asphalt, bitumens, coke and re nery sludges, or such re nery
petroleum fractions which have not undergone any process or
treatment as to produce separate chemically-de ned 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 fty percent (50%)
by weight of such petroleum products;
o) Singapore Import Parity (SIP) shall refer to the deemed landed cost
of a petroleum product imported from Singapore at a free-on-board
price equal to the average Singapore Posting for that product at the
time of loading;
p) Singapore Posting shall refer to the price of petroleum products
periodically posted by oil re neries in Singapore and reported by
independent international publications; and
q) Wholesale Posted Price (WPP) shall refer to the ceiling price of
petroleum products set by the Board based on its duly approved
automatic pricing formula.
CHAPTER II
Liberalization of the Downstream Oil Industry and Promotion of Free Competition
SECTION 5. Liberalization of the Industry. — 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
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 re neries 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 or entity who shall engage in any
such activity shall give prior notice thereof to the DOE for monitoring purposes:
Provided, further, That such notice shall not exempt such person or entity from securing
certi cates of quality, health and safety and environmental clearance from the proper
governmental agencies: Provided, furthermore, That such person or entity shall, for
monitoring purposes, report to the DOE his or its every importation/exportation:
Provided, nally, That all oil importations shall be in accordance with the Basel
Convention.
SECTION 6. Tariff Treatment . — a) Any law to the contrary notwithstanding
and starting with the effectivity of this Act, a single and uniform tariff duty shall be
imposed and collected both on imported crude oil and imported re ned petroleum
products at the rate of three percent (3%): Provided, however, That the President of the
Philippines may, in the exercise of his powers, reduce such tariff rate when in his
judgment such reduction is warranted, pursuant to Republic Act No. 1937, as amended,
otherwise known as the "Tariff and Customs Code": Provided, further, That beginning
January 1, 2004 or upon implementation of the Uniform Tariff Program under the World
Trade Organization and ASEAN Free Trade Area commitments, the tariff rate shall be
automatically adjusted to the appropriate level notwithstanding the provisions under
this Section.
b) For as long as the National Power Corporation (NPC) enjoys exemptions
from taxes and duties on petroleum products used for power generation, the
exemption shall apply to purchases through the local re neries and to the importation
of fuel oil and diesel.
SECTION 7. Promotion of Fair Trade Practices . — The Department of Trade
and Industry (DTI) and DOE shall take all measures to promote fair trade and prevent
cartelization, monopolies, combinations in restraint of trade, and any unfair competition
in the Industry as de ned in Article 186 of the Revised Penal Code, and Articles 168 and
169 of Republic Act No. 8293, otherwise known as the "Intellectual Property Rights
Law". The DOE shall continue to encourage certain practices in the Industry which serve
the public interest and are intended to achieve e ciency and cost reduction, ensure
continuous supply of petroleum products, and enhance environmental protection.
These practices may include borrow-and-loan agreements, rationalized depot and
manufacturing operations, hospitality agreements, joint tanker and pipeline utilization,
and joint actions on oil spill control and fire prevention.
The DOE shall monitor the relationship between the oil companies (re ners and
importers) and their dealers, haulers and LPG distributors to help ensure the
observance of fair and equitable practices and to ensure the enforcement of existing
contracts: Provided, That the DOE shall conciliate and arbitrate any dispute that may
arise with respect to the contractual relationship between the oil companies and the
dealers, haulers and LPG distributors involving the dealers' mark-up, the freight rate in
transporting petroleum products and the margins of LPG distributors for the
protection of the public and to prevent ruinous competition: Provided, further, That the
arbitration award of the DOE shall be subject to judicial review under existing law.
SECTION 8. Program to Encourage the Entry of New Participants in the
Industry. — The DOE, the Department of Foreign Affairs (DFA) and the DTI shall jointly
formulate and establish a program that will promote the entry of new participants in the
Industry. Such program shall, among others, include a strategic international
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 information campaign to be implemented through selected embassies and consular
o ces of the Philippines. This program shall commence implementation after three (3)
months from the effectivity of this Act.
In this regard, the DOE shall provide a "Philippine Downstream Oil Industry
Investment Guide" to new industry participants and prospective participants. This guide
shall, among others, contain:
a) An introduction to the Philippine Downstream Oil Industry and the
government's unwavering commitment to deregulation;
b) The entry requirements;
c) Information on the bene ts and incentives for new industry
participants which shall specify: (i) all the incentives and bene ts they
can enjoy, and (ii) the procedural and substantive requirements
needed for entitlement; and
d) Such other information the DOE may deem necessary to promote the
entry of new participants.
SECTION 9. Incentives for New Investments. — To the extent applicable,
persons with new investments as determined by the DOE and registered with the BOI in
re ning, storage, marketing and distribution of petroleum products, shall be extended
the same incentives granted to BOI-registered enterprises engaged in a preferred area
of investments pursuant to Executive Order No. 226, otherwise known as the "Omnibus
Investment Code of 1987".
Such incentives shall include:
1) Income tax holiday;
2) Additional deduction for labor expenses;
3) Minimum tax and duty of three percent (3%) and value-added tax
(VAT) on imported capital equipment;
4) Tax credit on domestic capital equipment;
5) Exemption from contractor's tax;
6) Unrestricted use of consigned equipment;
7) Exemption from the real property tax on production equipment or
machineries;
8) Exemption from taxes and duties on imported spare parts; and
9) Such other applicable incentives under Article 39 of Executive Order
No. 226.
Any provision of law to the contrary notwithstanding, the said incentives may be
availed by persons with new investments for a period of ve (5) years from registration
with the BOI: Provided, however, That in the storage, marketing and distribution of
petroleum products, only the investments of new industry participants shall be entitled
to incentives provided in the said Code. As used herein, "marketing of petroleum
products" shall include the establishment of gasoline stations.
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 For this purpose, the industry shall be included in the annual Investment Priorities
Plan (IPP): Provided, That nothing herein contained shall preclude quali ed persons or
entities as provided under the "Omnibus Investments Code" from applying for or
continue enjoying incentives and benefits under the said Code.
SECTION 10. Promotion of Retail Competition. — To achieve the social policy
objective of fair prices, and facilitate the attainment of a truly competitive petroleum
product market in the retail level, the DOE shall promote and encourage by way of
information dissemination, networking, and management/skills training, the active and
direct participation of the private sector and cooperatives in the retailing of petroleum
products through joint venture/supply agreements with new industry participants for
the establishment and operation of gasoline stations: Provided, That the training herein
shall include LPG retailing.
To this end, the DOE shall, in cooperation with the Technology and Livelihood
Resource Center (TLRC) and Technical Education and Skills Development Authority
(TESDA), coordinate with new industry participants and existing petroleum dealers'
associations in the formulation and implementation of a two-fold program on
management and skills training for the establishment, operation, and maintenance of
gasoline stations.
Persons who successfully complete the two-fold program shall be entitled to
government assistance being extended by government lending agencies, in the form of
medium-to long-term loans with low interest rates and to the gasoline station training
and loan fund provided hereunder, to serve as capital for the establishment and
operation of gasoline stations.
For these purposes, there is hereby established a gasoline station training and
loan fund with the initial amount of Three hundred million pesos (P300,000,000.00) to
be provided by the Philippine Amusement and Gaming Corporation (PAGCOR) and
administered by the DOE under a separate account.
Of this amount, two percent (2%) plus any additional funding shall be allocated
for the two-fold program; one percent (1%) plus any additional funding shall be set
aside for administrative, maintenance, and other operating expenses; ninety-four
percent (94%) shall be used exclusively for lending and nancial assistance; the
remaining three percent (3%) shall be utilized in accordance with the provision of
Section 26 of this Act: Provided, That the loans to be awarded herein shall be from
short- to medium-term with low interest rates: Provided, further, That these loans shall
be awarded to quali ed persons who are able to comply with the conditions set forth in
the next two (2) preceding paragraphs.
CHAPTER III
Anti-Trust Safeguards, Other Prohibited Acts and Remedies
SECTION 11. Anti-Trust Safeguards . — To ensure fair competition and
prevent cartels and monopolies in the Industry, the following acts are hereby
prohibited:
a) Cartelization which means any agreement, combination or concerted
action by re ners, importers and/or dealers, or their representatives,
to x prices, restrict outputs or divide markets, either by products or
by areas, or allocate markets, either by products or by areas, in
restraint of trade or free competition, including any contractual
stipulation which prescribes pricing levels and profit margins;
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 b) Predatory pricing which means selling or offering to sell any oil
product at a price below the seller's or offeror's average variable cost
for the purpose of destroying competition, eliminating a competitor or
discouraging a potential competitor from entering the market:
Provided, however, That pricing below average variable cost in order
to match the lower price of the competitor and not for the purpose of
destroying competition shall not be deemed predatory pricing. For
purposes of this prohibition, "variable cost" as distinguished from
" xed cost", refers to costs such as utilities or raw materials, which
vary as the output increases or decreases and "average variable cost"
refers to the sum of all variable costs divided by the number of units
of outputs.
Any person, including but not limited to the chief operating o cer, chief
executive o cer or chief nance o cer of the partnership, corporation or any entity
involved, who is found guilty of any of the said prohibited acts shall suffer the penalty of
three (3) to seven (7) years imprisonment, and a ne ranging from One million pesos
(P1,000,000.00) to Two million pesos (P2,000,000.00).
SECTION 12. Other Prohibited Acts. — To ensure compliance with the
provisions of this Act, the refusal to comply with any of the following shall likewise be
prohibited:
(a) submission of any reportorial requirements;
(b) use of clean and safe (environment and worker-benign) technologies;
(c) any order or instruction of the DOE Secretary issued in the exercise of
his enforcement powers under Section 15 of this Act; and
(d) registration of any fuel additive with the DOE prior to its use as an
additive.
Any person, including but not limited to the chief operating o cer or chief
executive o cer of the partnership, corporation or any entity involved, who is found
guilty of any of the said prohibited acts shall suffer the penalty of imprisonment for two
(2) years and ne ranging from Two hundred fty thousand pesos (P250,000.00) to
Five hundred thousand pesos (P500,000.00).
SECTION 13. Remedies. — a) Government Action — Whenever it is
determined by the Joint Task Force created under Section 14 (d) of this Act, that there
is a threatened, imminent or actual violation of Section 11 of this Act, it shall direct the
provincial or city prosecutors having jurisdiction to institute an action to prevent or
restrain such violation with the Regional Trial Court of the place where the defendant or
any of the defendants reside or has his place of business. Pending hearing of the
complaint and before nal judgment, the court may at any time issue a temporary
restraining order or an order of injunction as shall be deemed just within the premises,
under the same conditions and principles as injunctive relief is granted under the Rules
of Court.
Whenever it is determined by the Joint Task Force that the Government or any of
its instrumentalities or agencies, including government-owned or -controlled
corporations, shall suffer loss or damage in its business or property by reason of
violation of Section 11 of this Act, such instrumentality, agency or corporation may le
an action to recover damages and the costs of suit with the Regional Trial Court which
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 has jurisdiction as provided above.
b) Private Complaint. — Any person or entity shall report any violation of
Section 11 of this Act to the Joint Task Force. The Joint Task Force shall investigate
such reports in aid of which the DOE Secretary may exercise the powers granted under
Section 15 of this Act. The Joint Task Force shall prepare a report embodying its
ndings and recommendations as a result of any such investigation, and the report
shall be made public at the discretion of the Joint Task Force. In the event that the Joint
Task Force determines that there has been a violation of Section 11 of this Act, the
private person or entity shall be entitled to sue for and obtain injunctive relief, as well as
damages, in the Regional Trial Court having jurisdiction over any of the parties, under
the same conditions and principles as injunctive relief is granted under the Rules of
Court.
CHAPTER IV
Powers and Functions of the DOE and DOE Secretary
SECTION 14. Monitoring. — a) The DOE shall monitor and publish daily
international crude oil prices, as well as follow the movements of domestic oil prices. It
shall likewise monitor the quality of petroleum 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 national standards/protocols of
quality. The Bureau of Product Standards (BPS) 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 speci cations for all types of fuel and fuel-related
products to improve fuel composition for increased e ciency and reduced emissions.
The BPS shall also specify the allowable content of additives in all types of fuels and
fuel-related products.
b) The DOE shall monitor the re ning and manufacturing processes of local
petroleum products to ensure that clean and safe (environment and worker-benign)
technologies are applied. This shall also apply to the process of marketing local and
imported petroleum products.
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, re ners, and marketers are hereby required to
submit monthly to the DOE their actual and projected importations, local purchases,
sales and/or consumption, and inventory on a per crude/product basis.
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
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 ling the necessary complaint with the proper court or agency
motu proprio. cdtai

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 rules and
guidelines to be adopted by the Task Force in the performance of its duty. These
guidelines shall ensure e ciency, promptness, and effectiveness in the handling of its
cases. The Task Force shall be organized and its members appointed within one (1)
month from the effectivity of this Act.
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 e) In times of national emergency, when the public interest so requires, the
DOE may, during the emergency and under reasonable terms prescribed by it,
temporarily take over or direct the operation of any person or entity engaged in the
Industry.
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 and entities engaged
in a particular activity of the Industry: (i) to le an annual or special
report, or both in such form as the Secretary may prescribe; or (ii) to
answer speci c 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
ling such reports or answer. Such reports and/or answer shall be
led 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;
f) Concomitant with the policy of ensuring a continuous, adequate and
economic supply of energy to exercise his powers and functions as
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 not have any authority to make public any trade
secret or any commercial or nancial information which is obtained
from any person or entity and which is privileged or con dential,
except that the Secretary may disclose such information to o cers
and employees of appropriate law enforcement agencies or to any
o cer or employee of any such law enforcement agency upon the
prior certi cation by an o cer of any such law agency that such
information will be maintained in con dence and will be used only for
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 official law enforcement purposes; and
h) Whenever a nal 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 ndings and
recommendations as a result of any such investigation, and the report
shall be made public at the discretion of the Secretary.
CHAPTER V
Transition Phase
SECTION 16. Phases of Deregulation. — In order to provide a smooth
implementation of deregulation, the policy shift shall be done in two (2) phases: Phase I
(Transition Phase) and Phase II (Full Deregulation Phase).
SECTION 17. Buffer Fund. — The President may, when the interest of the
consumers so requires, taking into account the rise in the domestic prices of petroleum
products, use the "Reserve Control Account" as a buffer fund in an amount not
exceeding Two billion nine hundred million pesos (P2,900,000,000.00) to cover
increases in the prices of petroleum products, except premium gasoline, during the
Transition Phase over the prices prevailing as of the date of the effectivity of this Act.
The "Reserve Control Account" refers to a lump sum collation of reserve impositions
deducted from the appropriations approved by Congress for the operation of the
government and the implementation of projects and programs.
SECTION 18. Automatic Oil Pricing Mechanism. — To enable the domestic
price of petroleum products to approximate and promptly re ect the price of oil in the
international market, an automatic pricing mechanism shall be established. To this end,
the following laws are hereby amended:
a) Paragraph (a), Section 8 of Republic Act No. 6173, as amended by Section
3 of Executive Order No. 172, to read as follows:
"SEC. 8. Powers of the Board Upon Notice and Hearing. — The Board shall
have the power:

"a) To set the wholesale posted price of petroleum products during the
Transition Phase.

"For this purpose and for the protection of the public interest, the Board shall, after
due notice and hearing at which any consumer of petroleum products and other
parties who may be affected may appear and be heard, and within one (1) month
after the effectivity of this Act, approve a market-oriented formula to determine
the WPP of petroleum products based solely on the changes of either the
Singapore Posting of re ned petroleum products, the SIP or the crude landed
cost.
"Thereafter, the Board shall at the proper times automatically adjust the WPP of
petroleum products based on the approved formula, through appropriate orders,
without the need for notice and hearing.
"The Board shall, on the dates of effectivity of the automatic oil pricing formula,
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 the initial WPP or the adjusted WPP, publish the same, together with the
corresponding computation in two (2) national newspapers of general
circulation."

b) Paragraph 1 of Letter of Instruction No. 1441, to read as follows:

"1. To review and reset prices of domestic petroleum products up or down as
necessary on or before the third Monday of each month to re ect the new WPP of
refined petroleum products based on the approved automatic pricing formula."

c) Paragraph 2 of Letter of Instruction No. 1441 is hereby deleted. In lieu

thereof a new paragraph is inserted to read as follows:
"2. The price adjustment shall be re ected automatically in the approved
WPP of each petroleum product."

d) The provisions of Section 3(a) and (c) and Section 5 of Executive Order
No. 172 to the contrary notwithstanding, the Board shall, during the Transition Phase,
maintain the current margin of dealers and rates charged by water transport operators,
haulers and pipeline concessionaires. Depending on the basis of the APM, the Board
shall, within one (1) month after the effectivity of this Act and after proper notice and
full public hearing, prescribe a formula which will automatically set the margins of
marketers and dealers, and the rates charged by water transport operators, haulers and
pipeline concessionaires: Provided, That such formula shall take effect simultaneously
with the effectivity of the automatic oil pricing formula. Thereafter, the Board shall set
the said margins and rates based on the approved formula without the necessity for
public notice and hearing.
The Board shall, on the day of the effectivity of the aforesaid formula, publish in
at least two (2) newspapers of general circulation the mechanics of the formula for the
information of the public.
CHAPTER VI
Full Deregulation Phase
SECTION 19. Start of Full Deregulation. — Full deregulation of the Industry
shall start ve (5) months following the effectivity of this Act: Provided, however, That
when the public interest so requires, the President may accelerate the start of full
deregulation upon the recommendation of the DOE and the Department of Finance
(DOF) when the prices of crude oil and petroleum products in the world market are
declining and the value of the peso in relation to the US dollar is stable, taking into
account relevant trends and prospects: Provided, further, That the foregoing provision
notwithstanding, the ve (5)-month Transition Phase shall continue to apply to LPG,
regular gasoline and kerosene as socially-sensitive petroleum products and said
petroleum products shall be covered by the automatic pricing mechanism during the
said period.
Upon the implementation of full deregulation as provided herein, the Transition
Phase is deemed terminated and the following laws are repealed:
a) Republic Act No. 6173, as amended;
b) Section 5 of Executive Order No. 172, as amended;
c) Letter of Instruction No. 1431, dated October 15, 1984;

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 d) Letter of Instruction No. 1441, dated November 20, 1984, as
amended;
e) Letter of Instruction No. 1460, dated May 9, 1985;
f) Presidential Decree No. 1889; and
g) Presidential Decree No. 1956, as amended by Executive Order No.
137:
Provided, however, That in case full deregulation is started by the President in the
exercise of the authority provided in this Section, the foregoing laws shall continue to
be in force and effect with respect to LPG, regular gasoline and kerosene for the rest of
the five (5)-month period.
SECTION 20. Jurisdiction on Pricing of Piped Gas. — Section 3 of Executive
Order No. 172, is hereby amended to read as follows:
"SEC. 3. Jurisdiction, Powers and Functions of the Board. — The Board shall,
upon proper notice and hearing, x and regulate the rate of schedule or prices of
piped gas to be charged by duly franchised gas companies which distribute gas
by means of underground pipe system."

CHAPTER VII
Final Provisions
SECTION 21. OPSF Balance. — All outstanding claims against OPSF as of the
effectivity of this Act, subject to the existing auditing rules and regulations of the
Commission on Audit (COA), shall be considered as accounts payable of the National
Government. For this purpose, and any law to the contrary notwithstanding, the
reimbursement certi cates issued by the DOE covering the said outstanding claims
shall be honored and accepted by the Bureau of Customs and the Bureau of Internal
Revenue as payment to the extent of ten percent (10%) per payment of the tariff duties
and speci c taxes due from the creditor-claimants against the OPSF until such claims
are settled in full: Provided, That the reimbursement certi cates shall not be
transferable.
SECTION 22. Initial Public Offering. — In compliance with the constitutional
mandate to encourage private enterprises to broaden their base of ownership and in
recognition of the vital role of oil in the national economy, any person or entity engaged
in the oil re nery business shall make a public offering through the stock exchange of
at least ten percent (10%) of its common stock within a period of three (3) years from
the effectivity of this Act or the commencement of its re nery operations: Provided,
That no single person or entity shall be allowed to own more than ve percent (5%) of
the stock offering: Provided, further, That any crude oil re ning company and any
stockholder thereof shall not acquire, directly or indirectly, any share of stock offered
by any other crude oil re ning company pursuant to this Section: Provided, nally, That
any such company which made the requisite public offering before the effectivity of this
Act shall be exempted from the requirement.
SECTION 23. Implementing Rules and Regulations. — The DOE, in
coordination with the Board, the DENR, DFA, Department of Labor and Employment
(DOLE), Department of Health (DOH), DOF, DTI, National Economic and Development
Authority (NEDA) and TLRC, shall formulate and issue the necessary implementing rules
and regulations within sixty (60) days after the effectivity of this Act.
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 SECTION 24. Penal Sanction. — Any person who violates any of the provision
of this Act shall suffer the penalty of three (3) months to one (1) year imprisonment and
a ne ranging from Fifty thousand pesos (P50,000.00) to Three hundred thousand
pesos (P300,000.00).
SECTION 25. Public Information Campaign. — The DOE, in coordination with
the Board and the Philippine Information Agency (PIA), shall undertake an information
campaign to educate the public on the deregulation program of the Industry.
SECTION 26. Budgetary Appropriations. — Such amount as may be
necessary to effectively implement this Act shall be taken by the DOE from its annual
appropriations, the DOE's Special Fund created under Section 8 of Presidential Decree
No. 910, as amended, and such amount allocated under Section 10 of this Act.
SECTION 27. Separability Clause. — If, for any reason, any section or
provision of this Act is declared unconstitutional or invalid, such parts not affected
thereby shall remain in full force and effect.
SECTION 28. Repealing Clause. — All laws, presidential decrees, executive
orders, issuances, rules and regulations or parts thereof, which are inconsistent with
the provisions of this Act are hereby repealed or immediately modified accordingly. cdasia

SECTION 29. Effectivity. — This Act shall take effect upon its complete
publication in at least two (2) newspapers of general circulation.
Approved: February 10, 1998
Published in Malaya and Manila Times on February 12, 1998. Published in the
Official Gazette, Vol. 94 No. 24, 131 Supp., on June 15, 1998.

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