Question & AnswerQ&A (DE)
The rules are officially titled the "Implementing Rules and Regulations (IRR) of the Downstream Oil Industry Deregulation Act of 1996."
The IRR applies to all persons or entities engaged in any or all activities of the domestic downstream oil industry, including blending, recycling, processing or re-processing of petroleum and crude oil products as well as persons or companies importing refined petroleum products for their own use.
The Downstream Oil Industry refers to the business of importing, exporting, re-exporting, shipping, transporting, processing, refining, storing, distributing, marketing, and/or selling crude oil, gasoline, diesel, LPG, kerosene, and other petroleum and crude oil products.
It is the process adopted by the Energy Regulatory Board to automatically adjust wholesale posted prices of petroleum products based on the Singapore Posting and other cost factors, following a specific formula.
Deregulation shall be done in two phases: Phase I (Transition Phase) and Phase II (Full Deregulation Phase).
Interested persons must submit authenticated documents including fire safety inspection certificates, facility permits, product liability insurance or quality certificates, and environmental compliance certificates, among others detailed in Section 8 of the IRR.
A tariff duty of 3% is imposed on imported crude oil, while a 7% tariff is imposed on imported refined petroleum products, except for fuel oil and LPG which are tariffed at 3%. These rates are subject to change starting January 1, 2004 only by Act of Congress.
They must maintain a minimum inventory equivalent to 10% of their annual sales volume or 40 days of supply, whichever is lower, with specific compositions of crude oil and refined products as stipulated.
Violators shall face criminal and administrative penalties as provided in Section 15 of the IRR, and in addition, administrative fines as prescribed under Section 20 of RA 8180 and Section 21 of the IRR.
All facilities and equipment used must comply with industry safety codes and standards, LPG systems must be installed by qualified servicemen, cylinders must be maintained safely and requalified, and LPG marketers must provide product liability insurance, among other requirements listed in Section 14(c).
The DOE-DOJ Task Force investigates reports of unreasonable increases in petroleum product prices and initiates necessary actions.
Full deregulation shall be implemented by the DOE not later than March 1997, upon approval of the President.
The importer must file a notice with the Bureau prior to actual loading indicating type, quantity, estimated loading and arrival dates, and port of discharge. For used oils and similar products, a clearance from DENR's EMB complying with RA 6969 is required.
Green for Unleaded Premium Gasoline, Red for Premium Low Lead Gasoline, Orange for Regular Gasoline, Yellow for Diesel Fuel, White for Kerosene, and Light Blue for LPG.
LPG refillers must test-weigh and leak-test every cylinder before leaving the plant, ensure cylinders are safe and properly maintained, fill cylinders only at authorized plants, and ensure cylinders are requalified every ten years from manufacture and every five years thereafter.