Title
Deregulated Local Downstream Oil Industry Admin Framework
Law
Executive Order No. 377
Decision Date
Oct 31, 1996
Executive Order No. 377 establishes the framework for the administration of the deregulated local downstream oil industry in the Philippines, with the Department of Energy as the lead agency responsible for ensuring oil supply security, compliance with standards, and fair trade regulations.
A

Overall Administration by the Department of Energy (DOE)

  • DOE is the lead agency responsible for overall administration, monitoring, and coordination of policies and programs.
  • Oversees security and continuity of oil supply, compliance with quality, safety, environmental standards, and fair trade regulations.
  • Publishes daily international oil prices.

Standards Setting Responsibilities

  • Several government agencies are tasked with setting quality, safety, environmental standards, and fair trade practices:
    • Department of Trade and Industry (DTI): Establishes and updates Philippine National Standards (PNS) related to petroleum products and associated facilities, enforces PNS, promotes fair trade, and encourages investments.
    • Department of Science and Technology (DOST): Prescribes calibration and verification standards of measuring instruments, accredits and assists municipal laboratories.
    • Department of Environment and Natural Resources (DENR): Prescribes environmental standards, issues environmental compliance certificates and permits, monitors emissions and effluents.
    • Department of Health (DOH): Sets allowable toxicity levels from petroleum products, issues health and safety guidelines, provides advisory services, and conducts related health studies.
    • Department of Labor and Employment (DOLE): Sets and enforces worker safety standards, regulates pressure vessel operation and electrical safety, develops handling and storage guidelines, conducts information dissemination.
    • Department of Transportation and Communication (DOTC): Sets safety and roadworthiness standards for petroleum carriers, regulates transport routes, and establishes fares.

Enforcement of Standards

  • Multiple agencies ensure compliance with quality, safety, environmental, and trade regulations:
    • Department of Interior and Local Government (DILG): Ensures local compliance with safety, environmental, and labor standards; enforces Fire Code provisions; issues permits for oil facilities.
    • Department of Public Works and Highways (DPWH): Enforces the National Building Code for downstream oil infrastructure.
    • Philippine Economic Zone Authority (PEZA) and Subic Bay Metropolitan Authority (SBMA): Prevent smuggling and dumping in Special Economic Zones.
    • Department of Finance (DOF): Manages import tariffs, collects taxes and duties, monitors imported oil quality and compliance.
    • Department of Justice (DOJ): Handles legal cases involving cartelization, overpricing, and predatory pricing.
    • Department of National Defense (DND): Controls illegal entry and smuggling; prevents maritime pollution.
    • Energy Regulatory Board (ERB): Regulates prices of piped gas during full deregulation.

Policy Support by NEDA

  • National Economic and Development Authority (NEDA) conducts studies on social, economic, and financial impacts of petroleum price changes for policy formulation and review.

Transition Pricing by Energy Regulatory Board (ERB)

  • During deregulation transition, ERB sets and reviews wholesale domestic prices based on automatic pricing formula.
  • Maintains dealer margins and transport rates, and prescribes automatic rate-setting formulas.
  • Issues orders for additional payments to augment the Oil Price Stabilization Fund.

Reportorial Requirements

  • All concerned agencies must submit quarterly reports to DOE on activities, compliance, and developments requiring government action.

Repeal of Inconsistent Issuances

  • All conflicting orders, rules, and regulations are repealed or modified accordingly.

Effectivity

  • The Executive Order takes effect immediately upon issuance on October 31, 1996.

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