LPG Industry Regulation Framework and Penalties

State policy and purpose

The State policy is to protect the interests of end-consumers, ensure their general welfare, and establish standards of conduct for the LPG industry.
The State must institute reforms in existing standards of conduct and codes of practice for the LPG industry.
The State must ensure health, safety, security, environmental, and quality standards for LPG industry operations and for LPG pressure vessels and ancillary equipment.
The State must promote end-consumer awareness for the proper use of LPG pressure vessels and ancillary equipment through information dissemination and end-consumer education campaigns.
The State must uphold end-consumers’ right to freely choose the trademark or trade name of LPG-filled cylinders to improve competition.
The State must be at the forefront of technological innovation for safe LPG operations through partnerships and homegrown advancements.

Key definitions established

“LPG” means commercial propane, commercial butane, or a mixture of both gases, with properties conforming to Philippine National Standard (PNS).
“LPG pressure vessel” means an unfired sealed containment for LPG with internal pressure more than 1.03 barg, designed, fabricated, manufactured, examined, and tested in accordance with prescribed standards and codes (including bulk storage tanks, cylinders, cartridges, auto-LPG containers, and similar containers).
“LPG cylinder” means a refillable pressure vessel with up to one hundred fifty (150) liters water capacity.
“LPG cartridge” means a non-refillable receptacle with capacities of not exceeding one thousand (1,000) milliliter (ml) for metal receptacles, or five hundred (500) ml for synthetic material or glass receptacles (including canisters/cassettes).
“End-consumer” means any person who purchases LPG for own consumption, and excludes bulk consumers.
“Adulterated LPG” means mixing LPG with petroleum products, stock, or non-petroleum substances/materials that result in product quality change or failure to meet PNS specifications.
“Ancillary equipment” includes seals, valves, hoses, regulators, and other indispensable parts for safe operation of an LPG pressure vessel.
“License to operate” is a DOE certification issued to a natural or juridical person for a specific LPG activity after compliance with documentary requirements, quality and safety standards, and DOE and other government agency rules.
“Qualified service person” is an individual who completed an approved LPG service training course by DOE/DTI and relevant agencies, or an accredited government-recognized organization.
“PNS” means standards promulgated by DTI-Bureau of Philippine Standards (DTI-BPS) under Republic Act No. 4109 and applicable laws, rules, and regulations.
“Underfilling” is defined by Section 39 by reference to the net quantity delivered compared with required cylinder content.
“Illegal refilling” is defined by Section 40 by reference to prohibited refilling acts and conditions.

Government agency roles and enforcement

The Department of Energy (DOE) is the lead agency and is responsible for implementation and enforcement of the Act, including regulation, supervision, and monitoring of the LPG industry and participants for compliance with health, safety, security, environmental standards, applicable PNS, and other accepted standards adopted as PNS by DTI.
The DOE must implement the LPG Industry Development Plan prepared in consultation with public and private stakeholders and integrated into the Philippine Energy Plan.
The DOE must implement compliance with PNS and other DTI-adopted codes/standards for refining plants, refilling plants, depots/storage areas, transportation facilities, retail outlets, auto-LPG dispensing stations, centralized LPG piping systems, LPG in circulation and ancillary equipment.
The DOE shall issue and enforce licenses to operate for qualified participants and has power to suspend or revoke, after due notice and hearing, for prohibited acts under Chapter XI.
The DOE may issue closure or cease and desist orders after due notice and hearing for prohibited acts under Chapter XI.
The DOE must direct trademark owners to periodically submit LPG pressure vessels for requalification.
The DOE may investigate violations motu proprio or upon report, impose and collect fines and penalties, and initiate administrative action and criminal action for responsible persons for violations, under the Act’s penalty chapter.
The DOE has authority to confiscate, recall, seize, impound, and prohibit:
- Noncompliant LPG seals (including illegal possession/use), and
- LPG and LPG pressure vessels/ancillary equipment that are nonconforming, defective, unsafe, injurious, dangerous, generic, underfilled, illegally refilled, defective/improperly marked, or substandard, and any that violate the Act.
The DOE must enforce visitorial powers to inspect premises, seals, ancillary equipment, and filled/unfilled vessels including those in transit, while protecting trade secrets and proprietary information as defined in implementing rules.
The DOE shall require written or electronic reports and create and maintain a central database of LPG participants and LPG supply levels; it must regularly publish the list of revoked license holders.
The DTI must develop and promulgate PNS for LPG and pressure vessels and related facilities and participate in determination of requalification methods and accredit requalifiers.
The DTI must certify manufacturers, importers, and repairers of LPG pressure vessels and auto-LPG conversion shops, determine requalification frequency, inspect and confirm compliance, and grant/revoke licenses and certificates.
The DILG must coordinate and cooperate with DOE for implementation including LGU permitting/monitoring with LGUs, BFP, and PNP.
The Bureau of Fire Protection (BFP) must strictly implement the Fire Code (Republic Act No. 9514) and its implementing rules on manufacturing, storage, handling, use, transportation of LPG, permits, and certificates, including issuing guidelines/regulations on fire safety for LPG facilities.
The LTO (and where applicable LTFRB) must issue guidelines/regulations for auto-LPG motor vehicles and authorized motor vehicles used for bulk and other LPG transport, in coordination with DOE and BFP.
The MARINA must issue guidelines/regulations for marine vessels transporting LPG and filled/unfilled pressure vessels, upon coordination with DOE and consultation with stakeholders.
Local Government Units (LGUs) assist in identifying impounded equipment areas, coordinate transporting/storing/disposing of confiscated items, suspend/revoke business permits/ licenses upon DOE notice, and communicate such within five (5) days.
The PNP and other law enforcement agencies assist DOE upon request, including inspections of LPG facilities and motor vehicles transporting LPG in bulk or in cylinders/cartridges.
The DENR must issue, together with DOE, guidelines for disposal of LPG, LPG contaminated water, and LPG pressure vessels.

Responsibilities of LPG industry participants

LPG industry participants must ensure that what they import, procure, utilize, manufacture, construct, operate, and sell complies with PNS, DTI-adopted standards, and other DOE/DTI standards/guidelines, including LPG, pressure vessels, ancillary equipment, facilities, auto-LPG conversion shops/dispensing stations, centralized LPG piping systems, and related transport vessels/vehicles.
LPG industry participants must observe safe LPG handling practices.
LPG industry participants must ensure that drivers and attendants of LPG transport motor vehicles are oriented on proper handling.
LPG industry participants must enter into contracts/agreements only with participants registered with DOE or holding a valid license to operate, whichever applies.

Bulk supply and distribution duties

A bulk supplier must ensure adequate and stable LPG supply in bulk and submit to DOE a certification on contracts entered into with bulk consumers within a reasonable period from execution.
A bulk distributor must ensure adequate and stable supply, submit to DOE a certification on contracts with LPG industry participants within a reasonable period, and ensure periodic testing and requalification of LPG pressure vessels and periodic calibration of measuring devices by the concerned government agency and duly recognized testing facility.
A hauler must submit to DOE a list of authorized motor vehicles used to transport filled/unfilled LPG cylinders/cartridges and comply with safety standards/guidelines for transport, and certify its contracts/agreements with LPG industry participants within a reasonable period from execution.

Refilling and retail chain duties

A refiller must fill LPG cylinders under its own trademark/trade name or under duly authorized trademarks/trade names.
A refiller must fill accurately with the required exact net content.
A refiller must test cylinder weight and conduct a leak test of every LPG cylinder before it leaves the refilling plant.
A refiller must refuse to refill LPG cartridges and cylinders not designed for refilling due to PNS noncompliance, or not certified/allowed by DTI, and not bearing required safety/quality marks.
A refiller must periodically check dealers and retail outlets for content requirements and proper calibration/sealing of measuring devices.
A trademark owner/marketer must carry its own trademark/trade name on LPG pressure vessels, provide adequate and timely supply, deliver correct weight, use a distinguishable color and marking scheme registered with DOE, register its LPG seal and seal manufacturer with DOE, maintain and repair vessels through licensed manufacturers/repairers and accredited requalifiers, provide servicing/delivery/technical assistance, and periodically check dealers/retail outlets for content and measuring device compliance.
A dealer must carry only the trademark/trade name of LPG of a refiller/marketer with whom it has a contract/agreement.
A dealer must sell only LPG in cylinders with the authorized LPG seal of its refiller/marketer and must provide measuring devices that accurately measure LPG-filled cylinders; it must ensure correct delivered weight and provide servicing/delivery/technical assistance.
A retail outlet must sell only the authorized trademarks/trade names it is authorized to carry and only LPG in cylinders with authorized LPG seals; it must provide accurate measuring devices and request a qualified service person for consumer services.

Registration, licensing, and permits

Bulk suppliers, refillers, and bulk consumers must register with the DOE before commencing construction of terminals and refilling plants (Section 23).
Every LPG industry participant must secure a license to operate for a specific activity, specific to site/plant/outlet, prior to commencement of commercial operation, and must publicly post the license in its establishment.
If a participant intends to engage in a new activity outside its current license to operate, it must obtain another license to operate for that new activity.
All LPG industry participants must conduct business only with participants that hold a valid license to operate for the specific activity involved.
The DOE has exclusive authority to issue the license to operate.
A license to operate is valid for three (3) years or such period as determined by DOE.
Existing participants at the time of effectivity must obtain a license to operate within six (6) months from promulgation of the implementing rules.
A bulk consumer and the owner/operator of a centralized LPG piping system must register with the DOE; if they engage in another LPG activity, they must secure another license to operate for that activity.
Registration does not exempt compliance with quality and safety requirements under the Act and existing laws.
Participants engaged in importation, requalification, manufacture, or repair of LPG pressure vessels must obtain applicable DTI certificates and licenses prior to commencement of commercial operation.
Existing participants doing such activities must secure required DTI certificates and licenses within six (6) months from promulgation of the implementing rules.

Auto-LPG regulation and LPG ownership rules

Participants importing/manufacturing auto-LPG containers/engines/accessories, installing/retrofitting motor vehicles, or operating auto-LPG conversion shops must comply with DTI and LTO requirements for quality and safety and other relevant agencies including BFP.
Participants constructing/operating auto-LPG dispensing stations must comply with DOE requirements and other relevant agencies including BFP.
Trademark ownership rules require compliance with durable marking requirements for cylinders with water capacity ≤ one (1) liter, and establish trademark owner obligations to ensure compliance, requalification, and safe release of cylinders for distribution.
Receipt by DOE of a notice/report (verified by DTI) of a lost, stolen, or missing LPG cylinder prima facie relieves the trademark owner from the obligation to ensure quality and safety for that cylinder.
Ownership of auto-LPG containers installed as inherent integral parts of a motor vehicle belongs to the motor vehicle owner, who must ensure compliance with quality and safety standards, rules, and regulations.

Cylinder exchange and improvement programs

Within six (6) months from effectivity of the implementing rules, the DOE must, together with DTI and in consultation with industry participants, consumer groups, and stakeholders, formulate and publish the LPG Cylinder Exchange and Swapping Program.
The Exchange and Swapping Program must include procedures and timelines for exchange, swapping, and buyback, and establishment of accredited LPG cylinder swapping centers.
The Exchange and Swapping Program is governed by principles including: alignment with the Improvement Program, paramount safety for end-consumers, freedom of choice, participation by all LPG industry participants, fair/reasonable/nondiscriminatory terms, and consultation when arrangements may significantly increase retail prices.
The DOE must create a task force to assist implementation of the Exchange and Swapping Program with public and private stakeholders.
Within six (6) months from effectivity of the implementing rules, the DOE must, together with DTI and stakeholders, formulate and publish the LPG Cylinder Improvement Program, including entities responsible, amount to be set aside for an Improvement Program fund, allowed uses and authorized utilizers, and procedures for fund access and audit.
The Improvement Program is governed by principles including: alignment with the Exchange Program, paramount safety, participation by all participants, rules on requalifying and permanently marking generic cylinders or cylinders without trademark owners, fair/reasonable/nondiscriminatory terms, and consultation when arrangements may significantly increase retail prices.
The Improvement Program must not apply to generic cylinders or cylinders without trademark owners that were illegally imported or are defective/injurious/unsafe/dangerous.
The DOE and DTI must determine a transition period for permanent marking of in-circulation generic or non-trademark cylinders that were not illegally imported and are not defective/injurious/unsafe/dangerous.
The transition period may not exceed three (3) years from effectivity of the LPG Cylinder Improvement Program.
The DOE must create a task force with stakeholders to assist implementation of the Improvement Program.

Monitoring, reporting, and database rules

When requiring reports and disclosures, the DOE is prohibited from sharing, disclosing, or making public trade secrets, proprietary data, and other confidential or privileged legitimate commercial information to the public or other LPG industry participants.
The DOE must create and maintain a central database open to the public, updated monthly.
The central database must include: corporate/business/trade name; registered trademark/trade name/logo of LPG and relevant equipment; certifications as to contracted counterparties for scoped activities; lists of lots, stolen, and missing cylinders; violations and related incidents; and other relevant information as determined by DOE.
The central database must not include trade secrets and other proprietary information as determined in implementing rules.

Cylinder/cartidge controls and transport

When DOE finds by motu proprio or upon complaints that an LPG cylinder or cartridge is uncertified, generic, substandard, defective, injurious, unsafe, or dangerous, the DOE must, after due notice, issue the appropriate order for immediate confiscation, recall, seizure, impoundment, or prohibition from public sale or distribution.
Requalified generic LPG cylinders already in the market at the time of effectivity that were not illegally imported must be allowed until the lapse of the transition period determined under the Improvement Program.
The cylinder or cartridge owner must be afforded an opportunity to be heard to determine the propriety of the DOE’s actions.
DOE must terminate proceedings and issue final determination within thirty (30) calendar days from issuance of the confiscation/recall/seizure/impoundment/prohibition order.
Confiscated/recalled/seized/impounded cylinders/cartridges that pose an imminent threat or danger of exploding must be disposed of without prior notice; DOE must notify the owner within five (5) calendar days after disposition.
It is unlawful for any person to refill LPG cartridges or to sell, trade, or distribute cartridges not designed/intended for LPG or noncompliant with PNS.

Transportation requirements

Motor vehicles used in transportation of bulk LPG and filled/unfilled LPG cylinders and cartridges must comply with DOE, LTO, and BFP guidelines issued under their respective functions in the Act.

Prohibited acts and penalties (operative rules)

The Act prohibits any natural or juridical person, whether an LPG industry participant or otherwise, from engaging in prohibited acts including operating without required licenses/permits/certificates/registration, including:
- engaging in any LPG activity without a valid DOE license to operate or registration (whichever is applicable) plus business permit and other required agency licenses/certificates, and
- manufacturing/repairing LPG pressure vessels, manufacturing LPG seals, and requalifying LPG pressure vessels without valid DTI licenses/permits/certificates.
The Act prohibits transacting/engaging with unauthorized persons, including knowingly selling/distributing LPG, LPG pressure vessels, or LPG seals to participants without required licenses/permits/certificates; manufacturing/distributing/refilling/selling LPG cylinders carrying a trademark/trade name without express approval of the trademark owner; and selling/exchanging/bartering/distributing/transferring/possessing empty LPG cylinders outside the LPG Cylinder Exchange and Swapping Program or without trademark owner consent.
The Act prohibits possessing LPG seals, including seals already used in cylinders, without authority from the trademark/trade name owner or its duly authorized reseller.
The Act prohibits failing to comply with safety design, safety practices, LPG and measuring devices requirements; fabricating/manufacturing LPG pressure vessels with substandard materials; manufacturing without required markings and safety/quality marks; stamping/marking wrong/misleading/incorrect/inaccurate information; creating/manufacturing illegal/fake LPG seals; and failing to comply with safety design and requirements for motor vehicles transporting LPG in bulk and LPG cylinders/cartridges.
The Act prohibits noncompliant LPG and pressure vessel dealings, including importing used/second-hand pressure vessels; importing brand new noncompliant pressure vessels without required DTI certificate/license; selling/distributing defective/injurious/unsafe/dangerous/noncompliant/substandard pressure vessels; selling/distributing refilled LPG cartridges; selling/distributing LPG-filled cylinders without a seal, with tampered/fake/broken/inappropriate/unauthorized seals, or seals not belonging to the trademark owner; and selling/distributing LPG pressure vessels without required markings and safety/quality marks.
The Act prohibits selling/distributing LPG through means other than LPG pressure vessels and using tools other than compliant ancillary equipment, and prohibits contract arrangements not recognized in the Act’s framework.
The Act prohibits filling pressure vessels with adulterated LPG; possession of LPG pressure vessels containing adulterated LPG is prima facie evidence of violation.
The Act prohibits selling adulterated LPG in bulk and in pressure vessels.
The Act prohibits refilling LPG cartridges.
The Act prohibits hauling/loading/transporting/allowing loading and transportation of bulk LPG or LPG-filled cylinders/cartridges beyond rated motor vehicle capacity or in a manner endangering life/safety of passengers or the public.
The Act prohibits storing LPG in pressure vessels beyond the volume prescribed in Republic Act No. 9514 and its revised implementing rules and regulations.
The Act prohibits selling or storing entry cylinders of other trademark owners beyond those allowed under Exchange and Swapping Program guidelines.
The Act prohibits possessing illegal or fake LPG seals.
The Act prohibits failing responsibilities of participants including failure to submit periodic reports; refusing/preventing/obstructing inspections; refusing/failing to participate in the Exchange and Swapping Program and Improvement Program; failure to submit required certification under Section 34; and failure to comply with other responsibilities under Chapter III.
The Act prohibits tampering with cylinders and related unfair practices, including destroying, tampering, altering, or modifying LPG pressure vessels (including changing valves, repainting, and relabeling), with an exception when done by the trademark owner; preventing end-consumers from purchasing LPG from trademark owners/marketers/refillers/dealers/retail outlets; refusing to refund the deposit on the LPG cylinder in the case of a trademark owner and its duly authorized dealer or retail outlet in accordance with implementing rules; adulterating LPG; pilfering LPG; and using the LPG Cylinder Improvement fund for purposes other than intended.

Underfilling and illegal refilling

Underfilling occurs when the refiller sells/transfers/delivers/fills a cylinder with net LPG quantity less than required at the refilling plant, or when the dealer/retail outlet sells/transfers/delivers cylinders with less than required content quantity; a broken/tampered/absent/removed seal or a cylinder without proper seal is prima facie evidence of underfilling.
Illegal refilling includes filing/refilling with products/substances other than LPG to achieve correct net weight; refilling directly from bulk tank trucks; unauthorized cross-filling; refilling from one cylinder to another; refilling other than in duly licensed refilling plants; refilling cylinders with defaced/tampered/illegible markings contrary to mandatory labeling/stamping; refilling noncompliant with PNS; refilling cylinders due for repair/requalification/scrappage or subject to DOE/DTI recall/prohibition; refilling by auto-LPG dispensing stations; unauthorized loading of bulk storage tanks; and any other filling/refilling in violation of the Act.

Penalties regime (administrative and criminal)

Section 41 provides that persons violating Section 38 face both administrative and criminal penalties depending on the specific prohibited act and offense number.
For violations of Section 38(a)(1) (operating without required license/permit/certificate/registration), the administrative fine is:
- first offense: minimum PHP 5,000.00 for each day of operation,
- second offense: minimum PHP 10,000.00 for each day of operation,
- third offense: minimum PHP 20,000.00 for each day of operation.
For violations of Section 38(a)(2) (knowingly engaging in unlicensed manufacturing/repair/seal manufacturing/requalification), the penalty structure is:
- first offense: minimum PHP 25,000.00 for every LPG pressure vessel or seal, plus confiscation of pressure vessels or seals,
- second offense: minimum PHP 50,000.00 for every LPG pressure vessel or seal, plus confiscation and suspension of license to operate; upon conviction, imprisonment of at least one (1) year but not more than three (3) years,
- third offense: minimum PHP 100,000.00 for every LPG pressure vessel or seal, plus confiscation, closure, and permanent disqualification as an LPG industry participant; upon conviction, imprisonment of at least three (3) years and one (1) day but not more than six (6) years.
For violations of Section 38(b) (unauthorized transacting/engraving and unauthorized dealings), the penalty structure begins with:
- first offense: minimum PHP 10,000.00 for every LPG pressure vessel or seal, plus closure until licenses/permits are secured,
- second offense: minimum PHP 20,000.00 for every LPG pressure vessel or seal, plus suspension of license to operate and closure until licenses/permits are secured; upon conviction, imprisonment of at least six (6) months but not more than one (1) year,
- third offense: minimum PHP 30,000.00 for every LPG pressure vessel or seal, plus closure and permanent disqualification; upon conviction, imprisonment of at least one (1) year and one (1) day but not more than three (3) years.
For violations of Section 38(c)(1) and Section 38(c)(6), the administrative penalty for first offense is minimum PHP 300,000.00 for the first offense (additional offense gradations continue under the penalty schedule beyond the truncated portion shown).