Law amended and policy intent
- Presidential Decree No. 1865 amends Batas Pambansa Bilang 33, titled “An Act Defining and Penalizing Certain Prohibited Acts Inimical to the Public Interests and National Security Involving Petroleum and/or Petroleum Products, Prescribing Penalties Therefor and for Other Purposes.”
- The amendments focus on curbing petroleum industry practices described as widespread and pernicious.
- The decree provides increased administrative and criminal penalties to curb petroleum product adulteration, shortselling, and other prohibited acts inimical to public interest and national security.
- The decree expressly amends the prohibited acts, definitions, adds administrative sanctions and procedures, and revises penalties in Batas Pambansa Bilang 33.
Prohibited petroleum acts penalized
- Section 2 amends Section 2 of Batas Pambansa Bilang 33 to prohibit specific acts and penalize them upon conviction.
- Illegal trading in petroleum and/or petroleum products is prohibited.
- Petroleum fuel product adulteration is prohibited:
- adulteration of finished petroleum products; or
- possession of adulterated finished petroleum products for the purpose of sale, distribution, transportation, exchange or barter.
- Underdelivery or underfilling is prohibited:
- underdelivery or underfilling beyond authorized limits in the sale of petroleum products; or
- possession of underfilled liquefied petroleum gas cylinders for the purpose of sale, distribution, transportation, exchange or barter.
- The law assigns responsibility for delivery quantity and quality to industry participants and prescribes evidentiary presumptions and intent rules for certain conduct involving pumps, cylinders, tank trucks, and seals.
- The decree also prohibits additional acts under the same Section 2 list, including:
- hoarding;
- overpricing;
- misuse of petroleum allocations;
- speed contests and rallies using petroleum-derived fuels without the permit from the Bureau of Energy Utilization; and
- sky-diving and water skiing except when methanol is used for power-boat operation.
Responsibility and evidentiary presumptions
- The oil company, petroleum refiller, marketer, dealer and retailer (as the case may be) and the hauler are responsible for the quantity and quality of the petroleum product delivered when sold on delivery basis.
- Existence of the following facts creates presumptions under the prohibited-act provisions:
- Liquefied petroleum gas cylinders containing less than the required quantity and not properly identified, tagged and set apart and removed or taken out from display are presumed accessible to the public by marketers, dealers, sub-dealers or retail outlets and presumed for sale.
- In a petroleum product retail outlet selling to the public through a dispensing pump, absence of an out-of-order sign or padlock attached or affixed to the pump to prevent delivery constitutes a presumption of actual use of the pump in sale or delivery.
- Where the seal—whether official or of the oil company—affixed to the dispensing pump, tank truck, or liquefied petroleum gas cylinder is broken, or absent or removed, it gives rise to presumptions that:
- the dispensing pump is underdelivering; or
- the liquefied petroleum gas cylinder is underfilled; or
- the tank truck contains adulterated finished petroleum products or is underfilled.
- Use of the referenced pumps, cylinders, or containers to deliver products for sale or distribution constitutes prima facie evidence of intent to defraud by the hauler, marketer, refiller, dealer, retailer outlet operator.
Definitions for key offenses
- Section 3 amends Section 3 of Batas Pambansa Bilang 33 by setting definitions for terms used in the Act.
- Illegal trading in petroleum and/or petroleum products means:
- sale or distribution of petroleum products for profit without license or authority from the Bureau of Energy Utilization;
- non-issuance of receipts by licensed oil companies, marketers, distributors, dealers, sub-dealers and other retail outlets to final consumers; receipts for gas cylinders must indicate brand name, tare weight, gross weight, and price;
- refilling of liquefied petroleum gas cylinders without authority from the Bureau of Energy Utilization, or refilling another company’s or firm’s cylinders without written authorization;
- making or using in such cylinders a tare weight other than the actual or true tare weight;
- violation of rules and regulations of the Bureau of Energy Utilization regarding implementation of the Act;
- removal or unloading of petroleum products from any lorry, tank truck or delivery vehicle by any person other than the contracted purchaser, or in premises of the purchaser’s retail outlet or business establishment; and
- use of a pump metering unit not properly calibrated and sealed by the office of the city or municipal treasurer where the station or outlet is located, or by the National Science and Technology Authority (NSTA), or by any other government agency authorized therefor, or in absence thereof by the oil company; and
- use of a tank truck, lorry, hauling vehicle, or other conveyor other than vessels or barges for delivery of petroleum products that has not been registered with the Bureau of Energy Utilization and whose tanks, containers or compartment are not properly calibrated and sealed by the NSTA or any other authorized government agency.
- Petroleum fuel product adulteration means mixing any petroleum product with another finished or unfinished petroleum product or stock or with any non-petroleum substance or material that results in product quality change, or results in failure to meet product specifications prescribed by the Products Standards Agency of the Ministry of Trade and Industry.
- For adulteration, finished petroleum product refers to: Premium gasoline, regular gasoline, aviation gasoline, aviation turbo fuel, kerosene, diesel fuel, industrial fuel or package lube oils, and the definition does not apply to alcogas mixture and oil emulsions.
- Underfiling or underdelivery means sale, transfer, delivery or filling of petroleum products in a quantity actually beyond authorized limits than the quantity indicated or registered on the metering device of the container, including metered dispensing pumps, liquefied petroleum gas in cylinders, and lube oils in packages.
- Hoarding means:
- undue accumulation of a trader beyond normal inventory levels and/or unjustified refusal to dispose of, sell or distribute to consumers; or
- unreasonable accumulation by a person other than a trader.
- Overpricing means sale of petroleum and/or petroleum products at prices in excess of those duly authorized by the Board of Energy.
- Misuse of allocation means sale, transfer or diversion of mandated petroleum fuel allocation by oil companies, distributors, dealers or consumers contrary to the declared intent of the Government in making such allocation.
Administrative rules, sanctions, and procedure
- The Bureau of Energy Utilization must issue rules and regulations necessary to carry into effect the Act, subject to approval of the Minister of Energy, after consultation with affected industry sectors.
- The rules and regulations take effect fifteen (15) days from the date of publication in two (2) newspapers of general circulation.
- The Bureau of Energy Utilization may impose administrative sanctions in an administrative proceeding, after due notice and hearing, on any person who violates any provision of the rules and regulations.
- Administrative sanctions include:
- a fine of not more than PHP 10,000.00; or
- suspension or removal of the license or permit of a hauler, marketer, refiller, dealer, sub-dealer or retail outlet.
- A respondent may waive the hearing in any administrative proceedings.
- During pendency of the administrative proceeding, the Bureau may suspend business operations of a hauler, marketer, refiller, dealer, sub-dealer or retailer or retail outlet operator when the suspension is consistent with public interest.
- Administrative proceedings must be decided within thirty (30) days after filing of the last responsive pleading by the respondent, or termination and completion of the administrative proceeding.
- All law enforcement and other concerned government agencies must assist the Bureau of Energy Utilization in implementation.
- Administrative sanctions are without prejudice to filing a criminal action as warranted.
Criminal penalties, forfeiture, disqualifications
- Section 4 amends Section 4 on penalties.
- Any person who commits any act prohibited under the Act is punished upon conviction by:
- a fine of not less than PHP 20,000 but not more than PHP 50,000; and/or
- imprisonment of at least two (2) years but not more than five (5) years,
- with both fine and imprisonment imposed in the discretion of the court.
- For second and subsequent convictions under the Act, the penalty is both fine and imprisonment as provided.
- Petroleum and/or petroleum products that are the subject matter of illegal trading, adulteration, shortselling, hoarding, overpricing and/or misuse must be forfeited in favor of the Government.
- Forfeiture consequences include indemnification and refund rules depending on whether the petroleum products have already been delivered and paid for, or fully paid but not yet delivered:
- If petroleum and/or petroleum products have already been delivered and paid for, the offended party must be indemnified twice the amount paid.
- If the seller who has not yet delivered has been fully paid, the price received must be returned to the buyer with an additional amount equivalent to such price.
- If the offender is an oil company, marketer, distributor, refiller, dealer, sub-dealer, other retail outlets, or a hauler, the Act provides for cancellation of license in addition to other penalties.
- Trials of cases arising under the Act must be terminated within thirty (30) days after arraignment.
- If the offender is a corporation, partnership, or other juridical person, criminal liability attaches to the president, general manager, managing partner, or other officer charged with management of business affairs, or an employee responsible for the violation.
- If the offender is an alien, the Act provides that the alien is subject to deportation after serving the sentence.
- If the offender is a government official or employee, the Act provides that the offender is perpetually disqualified from office.
Repeal and effective date
- Section 5 repeals or modifies all laws, decrees, orders, instructions, rules and regulations that are inconsistent with or contrary to Presidential Decree No. 1865.
- Section 6 provides that the decree takes effect upon its approval.