Case Digest (G.R. No. 122876) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
The petitions for certiorari and prohibition in G.R. No. 124360 and G.R. No. 127867 challenge the constitutionality of Republic Act No. 8180, the “Downstream Oil Industry Deregulation Act of 1996,” and Executive Order No. 392, which declared full deregulation effective February 8, 1997. In G.R. No. 124360, Senator Francisco S. Tatad assails Section 5(b), mandating a 3% tariff on imported crude oil and 7% on imported refined products, alleging it violates the equal protection clause, the one subject–one title rule, and undermines the law’s free-market aim by favoring incumbent refineries. In G.R. No. 127867, petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada, FLAG Human Rights Foundation, Inc., Freedom from Debt Coalition, and Sanlakas contend that Section 15’s grant of discretion to the Department of Energy and the President to implement full deregulation not later than March 1997—and to accelerate it when “practicable” based on price declines or peso–... Case Digest (G.R. No. 122876) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Historical Regulation of the Oil Industry
- Pre-1971: No special regulation; four refineries and six marketing companies operated freely.
- 1971 Oil Crisis: Government enacted R.A. No. 6173 creating the Oil Industry Commission (OIC) with price-fixing and licensing powers.
- Rise of PNOC and Stabilization Fund
- 1973: Creation of Philippine National Oil Corporation (PNOC) to break foreign control; PNOC acquired existing refineries and marketing arms.
- 1984: Presidential Decree No. 1956 established the Oil Price Stabilization Fund (OPSF) to cushion price shocks, funded by tax adjustments and special levies.
- Further Regulatory Developments
- 1987: Executive Order No. 172 set up the Energy Regulatory Board (ERB) to fix prices, regulate pipelines and refineries, and maintain OPSF payments.
- 1992: R.A. No. 7638 created the Department of Energy (DOE), mandating deregulation of energy projects within four years.
- Downstream Oil Deregulation: R.A. No. 8180 and E.O. 392
- March 1996: R.A. 8180 deregulated the downstream oil industry in two phases—transition (non-pricing controls lifted) and full deregulation (price controls removed).
- Key Provisions:
- Sec. 5(b): Imposed 3% tariff on imported crude oil and 7% tariff on imported refined products; equalized in 2004.
- Sec. 6: Required refiners/importers to hold 40 days’ inventory or 10% of annual sales.
- Sec. 9(b): Prohibited predatory pricing below industry average cost.
- Sec. 15: Mandated full deregulation by March 1997, to be timed “as far as practicable” when world oil prices decline and the peso-dollar rate is stable.
- February 8, 1997: President Ramos issued E.O. 392, declaring full deregulation effective, citing OPSF depletion and stable market conditions.
- The Consolidated Petitions
- G.R. No. 124360 (Sen. Tatad): Challenged Sec. 5(b) on grounds of equal protection, one-subject-one-title rule, and failure to foster competition.
- G.R. No. 127867 (Lagman et al.): Contested Sec. 15 and E.O. 392 for undue delegation, arbitrary early deregulation, and facilitation of an oil cartel; also assailed Secs. 5(b), 6 and 9(b) as anti-competitive.
Issues:
- Procedural
- Do the petitions present a justiciable controversy or merely a policy dispute?
- Do petitioners have locus standi as legislators, taxpayers or concerned citizens?
- Substantive
- Does Sec. 5(b) violate the one-subject-one-title requirement?
- Does the 3%–7% tariff differential breach equal protection and impede competition?
- Does Sec. 15 unduly delegate legislative power by lacking “determinate or determinable standards”?
- Is E.O. 392 arbitrary and unreasonable for adding OPSF depletion as a criterion?
- Do Secs. 5(b), 6 and 9(b) create barriers to entry, thus contravening the constitutional prohibition on monopolies, restraints of trade and unfair competition?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)