House Committee on Energy chairman and Pampanga Rep. Juan Miguel “Mikey” Macapagal Arroyo said the proposed amendments to the Oil Deregulation Law will ensure fair and transparent pricing of fuel products despite global supply volatilities.
Arroyo said the committee report approved by his committee to amend Republic Act No. 8479 or the “Downstream Oil Industry Deregulation Act of 1998” has strong anti-trust safeguards to ensure fair competition and prevent cartels and monopolies from dictating prices.
“The amendments will prevent any unreasonable price increase, particularly over and above the indicative retail price as determined by the Oil Industry Management Bureau (OIMB) of the Department of Energy,” he said.
A provision in the proposed amendments calls for the creation of a task force composed of the Department of Energy and the Philippine Competition Commission to investigate any unreasonable increase in the prices of petroleum products.
Members of the task force will be appointed by the DOE secretary and the PCC chairman and will be tasked with the drafting of rules and guidelines to ensure efficiency, promptness and effectiveness in the handling the cases.
“Any report from any person of an unreasonable increase in the prices of petroleum products shall be immediately acted upon,” according to a provision of the substitute bill.
The committee report defines unreasonable price of petroleum products at the pump as unjustified, unsupported by evidence and/or unexplained by the implementing downstream oil industry participant.
Arroyo said the committee report, which substituted House Bills 10505, 4550, 4711, 5172, 5186, 7928, 8764 and 10386 and House Resolutions 9, 390 and 1651, aims to “ensure the availability of adequate supply of petroleum products in the country at reasonable prices”.
Among the salient features of the bill are the requirement for refiners, importers and bulk distributors to maintain a minimum inventory requirement on a per company, per depot and per product basis.
Industry players will also be required to submit an annual downstream oil industry development plan; submit their respective retail prices upon implementation of any price adjustment; observe the unbundling of retail prices to reflect the landed cost of crude oil or petroleum products at the time of purchase or the contracted price, port charges as well as refining, storage, handling, marketing, transshipment costs and other costs.
The substitute bill also stipulates that the volume of sales and required inventory stock are not covered by trade secret confidentiality and will be made part of any report to the DOE that it may require.
Meanwhile, the minimum inventory requirement will be measured in number of days the available supply will last. All refiners, importers and bulk distributors will be required to maintain at least 30 days of available supply at any given time, according to the substitute bill.
The bill also provides criminal and administrative fines and penalties for the violation of its provisions.
RA 8479 already requires the DOE to monitor and publish daily international crude oil prices, as well as follow the movements of domestic oil prices, but the proposed amendments provide the agency, together with the PCC, additional mandate to ensure that price increases are justified, fair and transparent, according to Arroyo.
The committee report substituted House Bill 10505 and House Resolution 1651 introduced by Arroyo; HB 4550 by Deputy Speaker Vilma Santos-Recto; HB 4771, HB 10386 and HR 9 by Bayan Muna Party-list Rep. Carlos Isagani Zarate; HB 5172 by Baguio City Rep. Mark Go; HB 5186 by Deputy Speaker Rodante Marcoleta; HB 7928 by APEC Party-list Rep. Sergio Dagooc; HB 8764 by Bohol Rep. Edgar Chatto and HR 390 by Deputy Minority Leader Stella Luz Quimbo. (Press Release)
