Policy, purpose, and guiding principles
- The State policy is to protect the interests of end-consumers and ensure their general welfare by establishing standards of conduct for the LPG industry.
- The State shall institute reforms in existing standards of conduct and codes of practice for the LPG industry.
- The State shall ensure health, safety, security, environmental, and quality standards across LPG activities and across the lifecycle of LPG pressure vessels (whichever is applicable).
- The State shall promote awareness through information dissemination and end-consumer education campaigns on proper use of LPG pressure vessels and ancillary equipment.
- The State shall uphold the end-consumer’s right to freely choose the trademark or trade name of LPG-filled cylinders and improve competition for the benefit of end-consumers.
- The State shall keep abreast of and develop technological innovation through partnerships with public and private stakeholders.
Scope and expressly defined concepts
- This Act applies to: (a) importing, refining, storing, exporting, refilling, transportation, distribution, and marketing of LPG; (b) importation, manufacture, requalification, repair, exchange, swapping, improvement, and scrappage of LPG pressure vessels (whichever is applicable); and (c) safe operations of the entire LPG industry including LPG facilities and residential, commercial, industrial, and automotive use of LPG.
- “Activity” includes LPG operations for residential, commercial, industrial, or automotive use, and LPG pressure vessel operations (including authorized LPG seals and other ancillary equipment) depending on applicability.
- “LPG” means commercial propane and/or commercial butane, or both, with properties conforming to the Philippine National Standard (PNS).
- “PNS” refers to standards promulgated by DTI-Bureau of Philippine Standards for specifications, test methods, terminologies, procedures, or practices pursuant to Republic Act No. 4109 and other applicable laws.
- The Act defines LPG pressure vessels to include bulk storage tanks, cylinders, cartridges, auto-LPG containers, and other similarly designed and tested containers, with internal pressure more than 1.03 barg.
- The Act defines LPG cylinder, LPG bulk storage (water capacity more than one hundred fifty (150) liters), and LPG cartridge (metal not exceeding one thousand (1,000) milliliter (ml); synthetic or glass not exceeding five hundred (500) ml).
- The Act defines industry participants by function: bulk supplier, bulk distributor, bulk consumer, hauler, refiller, repairer, requalifier, dealer, marketer, retail outlet, and trademark owner.
- The Act defines LPG-marking and trademark-linked ownership concepts, including “LPG seals,” “permanent marking,” “durable marking,” “generic LPG cylinder,” “LPG cylinder owner,” and “trademark owner.”
- The Act defines key program terms: “LPG Cylinder Exchange and Swapping Program,” “LPG cylinder exchange,” “LPG cylinder swapping,” “LPG cylinder buyback,” “LPG cylinder improvement,” and the “LPG Cylinder Improvement Program fund.”
- The Act provides performance and safety concepts: “Adulterated LPG,” “Defective pressure vessel,” “Substandard pressure vessel,” “Uncertified pressure vessel,” “Pilferage,” and “Underfilling.”
- The Act defines “License to operate” as a DOE-issued certification for a specific LPG activity after compliance with documentary requirements and quality and safety standards set by DOE and other agencies.
- The Act defines Qualified service person as one who completed an approved LPG training course for LPG service persons by DOE, DTI, and relevant agencies (or an accredited recognized organization).
Roles and enforcement of government agencies
- DOE is the lead agency and is the primary government agency responsible for implementation and enforcement of the Act.
- The DOE must regulate, supervise, and monitor the LPG industry and all LPG industry participants to ensure compliance with:
- health, safety, security, environmental standards,
- the applicable PNS, and
- other accepted codes and standards adopted by DTI as PNS.
- DOE powers and functions include:
- preparing the LPG Industry Development Plan (integrated into the Philippine Energy Plan) after consultation;
- implementing compliance with PNS and other accepted codes and standards for specified facilities and products (refining/refilling/depots/storage/transport/retail/auto-LPG dispensing stations/ancillary equipment and centralized LPG piping systems), as well as LPG in circulation and equipment used for those activities;
- issuing and enforcing compliance with licenses to operate for qualified LPG industry participants, including the power to suspend or revoke after due notice and hearing for violations of Chapter XI;
- issuing closure or cease and desist orders after due notice and hearing for violations of Chapter XI;
- issuing guidelines for disposal of LPG, LPG contaminated water, and LPG pressure vessels with DENR, and guidelines for authorized vehicles used to transport LPG and related cylinders/vessels and the registration of those vehicles pursuant to Section 37;
- directing trademark owners to periodically submit LPG pressure vessels for requalification under Section 7;
- convening technical working groups and technical committees for promulgation/review of policies and development of standards;
- approving and authorizing LPG seals of trademark owners and marketers;
- investigating motu propio or upon report and imposing/collecting fines and penalties and initiating administrative or criminal actions pursuant to Chapter XI;
- confiscating/recalling/seizing/impounding and prohibiting noncompliant LPG seals and noncompliant, defective, unsafe, injurious, dangerous, generic, underfilled, illegally refilled LPG and LPG pressure vessels/ancillary equipment;
- exercising visitorial powers (including record scrutiny except trade secrets/proprietary information) and inspecting premises, seals, ancillary equipment, and filled/unfilled pressure vessels including those in transit;
- requiring written or electronic reports pursuant to Section 33;
- creating and maintaining a central database and an inventory of existing and projected LPG supply levels pursuant to Section 34;
- publishing in a newspaper of general circulation or on the DOE website the list of LPG industry participants whose licenses to operate have been revoked;
- formulating and publishing guidelines for the LPG Cylinder Exchange and Swapping Program and the LPG Cylinder Improvement Program pursuant to Sections 31 and 32;
- conducting information and education activities with DOST for LPG safety/security/environmental/quality standards and for authorized transport methods and equipment;
- conducting research and development with DOST for improved LPG technologies and pressure vessel improvement methods.
- DTI powers and functions include:
- in collaboration with DOE and stakeholders, developing/promulgating/revising PNS covering facilities, equipment, cylinders/carriers, auto-LPG-related installations, and centralized LPG piping systems;
- determining methods of requalification and accrediting requalifiers through certificates;
- certifying manufacturers/importers/repairers of LPG pressure vessels and auto-LPG conversion shops pursuant to Republic Act No. 4109;
- determining frequency of requalification where applicable;
- inspecting/evaluating and confirming compliance with PNS and issuing licenses and certificates pursuant to Republic Act No. 4109;
- granting and revoking licenses and certificates pursuant to Section 26;
- undertaking joint information and education activities with DOE, DILG, and BFP.
- DILG powers and functions include coordinating and cooperating with DOE for orderly implementation, including LGU permitting/monitoring together with LGUs, BFP, and PNP, and extending necessary assistance for enforcement.
- BFP powers and functions include strict implementation of Republic Act No. 9514 (Fire Code of the Philippines of 2008) and its implementing rules for manufacturing/storage/handling/use/transport of LPG including fire safety devices and permits/certificates, plus issuance of guidelines for fire safety of LPG facilities and safety measures.
- LTO and LTFRB must issue guidelines and regulations for auto-LPG motor vehicles and facilities/inspection centers and for authorized motor vehicles transporting bulk LPG and filled/unfilled cylinders/vessels, together with DOE and BFP, pursuant to Section 37.
- MARINA issues guidelines and regulations governing marine vessels transporting LPG and filled/unfilled pressure vessels upon coordination with DOE and consultation with stakeholders.
- LGUs must assist DOE by identifying areas for impounded LPG pressure vessels/equipment, coordinating hauling/storing/decanting/disposing of confiscated materials, and must suspend or revoke business permits upon DOE’s notice of suspension or revocation; LGUs must communicate such action to DOE within five (5) days.
- PNP and other law enforcement agencies must assist DOE upon request, including inspections of LPG facilities and motor vehicles transporting LPG in bulk or in cylinders/cartridges.
- DENR must issue, together with DOE, guidelines for disposal of LPG, LPG contaminated water, and LPG pressure vessels.
Obligations of LPG industry participants
- An LPG industry participant must ensure that what it imports/procures/utilizes/manufactures/constructs/operates/sells complies with the PNS and standards adopted by DTI as PNS and all rules and guidelines issued under the Act, covering:
- LPG, pressure vessels, ancillary equipment, facilities, auto-LPG conversion shops, auto-LPG dispensing stations, and centralized LPG piping systems; and
- marine vessels and motor vehicles used to transport LPG and filled/unfilled pressure vessels, which must remain in safe operating condition at all times.
- An LPG industry participant must observe safe LPG handling practices and ensure drivers/attendants of transport motor vehicles are oriented on proper handling.
- An LPG industry participant must enter into contracts only with LPG industry participants registered with DOE or with a valid license to operate, whichever is applicable.
- A bulk supplier must ensure adequate and stable supply of LPG in bulk and must submit a certification to DOE on contracts/agreements with bulk consumers within a reasonable period from execution.
- A bulk distributor must ensure adequate and stable supply, submit a certification to DOE on contracts/agreements with LPG industry participants within a reasonable period from execution, and ensure periodic testing and requalification and periodic calibration of measuring devices.
- A hauler must submit to DOE a list of all authorized motor vehicles used for transporting filled/unfilled LPG cylinders or cartridges and comply with safety requirements and guidelines, and must submit certification on contracts/agreements within a reasonable period.
- A refiller must:
- fill LPG cylinders under its own trademark/trade name or duly authorized ones;
- fill accurately to the exact net content requirements;
- test cylinder weight and conduct a leak test before leaving the refilling plant;
- refill only LPG cylinders that comply with PNS and bear required safety and quality marks;
- refuse to refill LPG cartridges and cylinders not designed/intended for refilling due to noncompliance with PNS or not certified/allowed by DTI and lacking required safety/quality marks;
- periodically check compliance by dealers and retail outlets regarding content requirements and proper calibration/sealing of measuring devices.
- A trademark owner or marketer must carry its own trademark/trade name on LPG pressure vessels, ensure adequate and timely supply to dealers/retail outlets/end-consumers and correct weight of deliveries, use a distinguishable color and marking scheme and register it with DOE, register its LPG seal and its seal manufacturer with DOE, maintain and repair pressure vessels through duly licensed manufacturers/repairers and accredited requalifiers, provide servicing/delivery/technical assistance, and periodically check dealer/retail outlet compliance on content and measuring device calibration/sealing.
- A dealer must carry only LPG of the refiller/marketer it has a contract/agreement with, sell only LPG with an authorized LPG seal of its refiller/marketer, provide appropriate measuring devices, ensure correct weight deliveries, provide servicing/delivery/technical assistance, and periodically check retail outlet compliance on content and measuring device calibration/sealing.
- A retail outlet must sell only authorized trademarks/trade names under its contracts, sell only LPG with authorized LPG seals, provide accurate measuring devices, and request a qualified service person for services to end-consumers.
Registration, licensing, and operational authorizations
- Bulk suppliers, refillers, and bulk consumers must register with DOE before commencement of construction of terminals and refilling plants.
- Every LPG industry participant must secure a DOE-issued 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 premises; any new activity outside the current license requires another license to operate.
- All LPG industry participants must conduct business only with LPG industry participants that have a valid license to operate for the specific activity engaged in.
- DOE has exclusive authority to issue the license to operate, which is valid for three (3) years or such other period as DOE determines.
- Persons already engaged in any covered activity at the Act’s effectivity must obtain a license to operate within six (6) months from promulgation of the Act’s implementing rules and regulations.
- Bulk consumers and the owner/operator of a centralized LPG piping system must register with DOE; if they engage in another activity as an LPG industry participant, they must secure another license to operate for that activity.
- Registration does not exempt bulk consumers and centralized piping system owners/operators from compliance with quality and safety requirements under the Act and relevant laws including Republic Act No. 9514 and Republic Act No. 4109-linked standards.
- LPG industry 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, and existing participants must obtain required DTI certificates/licenses within six (6) months from promulgation of the implementing rules and regulations.
- Auto-LPG-related activities must comply with requirements, quality and safety standards, rules, and regulations issued by DOE and DTI (and LTO and other agencies including BFP), while construction/operation of auto-LPG dispensing stations must comply with DOE-issued requirements and other relevant agencies including BFP.
LPG pressure vessel ownership and exchange programs
- The trademark owner whose permanent mark or durable marking appears on LPG cylinders of water capacity less than or equal to one (1) liter must comply with durable marking requirements as determined by DOE and DTI.
- Ownership of that trademark-marked cylinder applies to cylinders sold, subject of exchange/swapping, or in the possession of refiller/bulk distributor/marketer/dealer/retail outlet/requalifier or other authorized persons under the trademark owner’s rights.
- The trademark owner must ensure all its cylinders comply with required quality and safety standards, including requalification, before release for distribution.
- Receipt by DOE of a notice or report from the trademark owner, verified by DTI, regarding lost/stolen/missing LPG cylinders prima facie relieves the trademark owner’s obligation to ensure quality and safety for such specific cylinders.
- For auto-LPG containers, the ownership is with the motor vehicle owner, and compliance with quality and safety standards must be ensured under the Act and existing laws.
Cylinder exchange and improvement implementation
- Within six (6) months from effectivity of the implementing rules and regulations, DOE must formulate and publish an LPG Cylinder Exchange and Swapping Program together with DTI and after consultation with all industry participants, consumer groups, and other stakeholders.
- The Exchange and Swapping Program must include procedures and timelines for exchange, swapping, and buyback of cylinders, and establishment of accredited swapping centers.
- The Exchange and Swapping Program is governed by these principles:
- alignment with the LPG Cylinder Improvement Program;
- safety is paramount for end-consumer protection;
- end-consumer freedom of choice in purchasing LPG-filled cylinders;
- all LPG industry participants must participate;
- contracts must use fair, reasonable, and non-discriminatory terms;
- arrangements that may significantly increase retail price must be subject to consultation with consumer groups and industry participants.
- DOE must create a task force with public and private stakeholders to assist implementation of the Exchange and Swapping Program.
- Within six (6) months from effectivity of the implementing rules and regulations, DOE must formulate and publish an LPG Cylinder Improvement Program with DTI and stakeholder consultation, including:
- entities responsible for establishing the fund,
- the amount to be set aside for the LPG Cylinder Improvement Program fund,
- allowed uses and entities authorized to utilize the fund, and
- procedures for access and audit of the fund.
- The Improvement Program is governed by these principles:
- alignment with the Exchange and Swapping Program;
- safety paramount for end-consumer protection;
- all LPG industry participants must participate;
- a generic cylinder or a cylinder without a trademark owner must first be requalified and then permanently marked with the trademark/trade name of the trademark owner last in possession, and that trademark owner becomes the owner exercising rights and obligations;
- the program does not apply to generic cylinders/cylinders without trademark owners that were illegally imported or are defective/injurious/unsafe/dangerous;
- contracts must use fair, reasonable, and non-discriminatory terms;
- arrangements that may significantly increase retail price require consultation.
- DOE and DTI must determine a transition period for permanent marking of generic and non-trademarked cylinders in circulation that were not illegally imported and are not defective/injurious/unsafe/dangerous.
- The transition period must not exceed three (3) years from the time of effectivity of the LPG Cylinder Improvement Program.
- DOE and DTI must create a task force to assist implementation of the LPG Cylinder Improvement Program.
Monitoring, reporting, and public database
- When DOE requires LPG industry participants to submit written or electronic forms/reports, DOE is prohibited from sharing, disclosing, or making available to the public and other LPG industry participants any information, document, plan, or report constituting trade secrets, proprietary data, and other legitimate commercial information that are confidential or privileged.
- DOE must create a central database open to the public and update it monthly.
- The central database must include:
- corporate/business/trade name of each LPG industry participant;
- registered trademark or trade name or logo of LPG and LPG pressure vessels and facilities/equipment;
- certifications identifying with whom a participant contracted for activities within the scope of the Act;
- list of lots, stolen, and missing LPG cylinders;
- violations committed and incidents relating to such violations;
- other relevant information determined by DOE.
- The central database excludes trade secrets and other proprietary information as determined in the implementing rules and regulations.
LPG cylinders and cartridges: confiscation, recalls, and rules
- When DOE finds, motu propio or upon complaints, that an LPG cylinder or cartridge is uncertified, generic, substandard, defective, injurious, unsafe, or dangerous, DOE must, after due notice, issue an order for immediate confiscation, recall, seizure, impoundment, or prohibition from public sale or distribution (as applicable).
- Duly requalified generic LPG cylinders already in the market at the time of the Act’s effectivity that were not illegally imported may be allowed until the lapse of the transition period determined pursuant to the LPG Cylinder Improvement Program.
- The LPG cylinder or cartridge owner must be afforded an opportunity to be heard upon issuance of the order to determine propriety.
- DOE must terminate the proceedings and make a final determination within thirty (30) calendar days from issuance of the confiscation/recall/seizure/impoundment/prohibition order.
- LPG-filled cylinders or cartridges that are confiscated/recalled/seized/impounded and found by DOE to pose an imminent threat or danger of exploding must be disposed of without serving prior notice to the owners.
- DOE must notify the owner within five (5) calendar days after such disposition.
- It is unlawful for any person to refill an LPG cartridge or sell, trade, or distribute cartridges not designed or intended for LPG or noncompliant with PNS.
Transport of LPG: compliance with vehicle guidelines
- All motor vehicles used to transport bulk LPG and filled/unfilled LPG cylinders and cartridges must comply with DOE, LTO, and BFP guidelines under Sections 6, 10, and 9, respectively.
Prohibited acts and penalties structure (Chapter XI)
- Any natural or juridical person, whether or not an LPG industry participant, is prohibited from engaging in prohibited acts enumerated in Section 38.
- Prohibited acts include engaging in activities without required DOE licenses/registrations and without required permits and certificates of relevant agencies, including manufacturing, repairing, and requalifying LPG pressure vessels and manufacturing LPG seals without valid DTI licenses/permits/certificates.
- Prohibited acts include transacting/ selling/distributing LPG, LPG pressure vessels, or LPG seals to LPG industry participants lacking required licenses/certificates/clearances/permits; manufacturing/distributing/refilling/selling LPG cylinders bearing a trademark/trade name without trademark owner approval; selling/exchanging/bartering/transferring/possessing empty cylinders outside the Exchange/Swapping Program without the trademark owner’s consent; and possessing LPG seals (including previously used seals) without authority from the trademark/trade name owner or authorized reseller.
- Prohibited acts include failing to comply with safety design and safety practices requirements for specified facilities and transport; fabricating/manufacturing using substandard materials; manufacturing pressure vessels without required markings and safety/quality marks; stamping/marking wrong/misleading/incorrect/inaccurate information; creating/manufacturing illegal or fake LPG seals; and failing to comply with required motor vehicle safety design/requirements/permits/clearances.
- Prohibited acts include importing used or second-hand pressure vessels; importing brand new pressure vessels noncompliant with PNS or without valid DTI certificate/license; selling and distributing defective/injurious/unsafe/dangerous/noncompliant/substandard pressure vessels; selling and distributing refilled LPG cartridges; selling LPG-filled cylinders without a seal, with tampered/fake/broken seal, with inappropriate/unauthorized seal, or with a seal not belonging to the trademark owner; selling LPG without required markings/safety/quality marks; selling/distributing through means other than LPG pressure vessels using noncompliant tools/contract arrangements; filling pressure vessels with adulterated LPG (and possession of pressure vessels containing adulterated LPG is prima facie evidence of violation); selling adulterated LPG in bulk and in pressure vessels; refilling LPG cartridges; and hauling/loading/transporting permitting loading/transportation in quantities beyond rated capacity or in a manner endangering life and safety.
- Prohibited acts include storing LPG in pressure vessels beyond the volume prescribed in Republic Act No. 9514 and its revised implementing rules and regulations; selling/storing entry cylinders of other trademark owners beyond those allowed under Exchange/Swapping Program guidelines; and possessing illegal or fake LPG seals.
- Prohibited acts include failing to submit periodic reports required by DOE; refusing/preventing/obstructing inspection of premises and records; refusing or failing to participate in the Exchange/Swapping Program and Improvement Program; failing to submit required certification; and failing to comply with other responsibilities under Chapter III.
- Prohibited acts include destroying/tampering/altering/modifying pressure vessels, including changing valves or repainting/relabeling (with the exception that it is not prohibited if done by the trademark owner); preventing end-consumers from purchasing LPG from specified participants; refusing to refund the deposit on LPG cylinders in accordance with implementing rules and regulations; adulterating LPG; pilfering LPG; and using the LPG Cylinder Improvement fund for purposes other than what it is intended for.
- “Underfilling” is established when a refiller sells/transfers/delivers/fills an LPG pressure vessel with net quantity less than plant-required content, or when a dealer/retail outlet sells/transfers/delivers with less than required content; a broken/tampered/absent/removed seal or a pressure vessel without the proper seal attached is prima facie evidence of underfilling.
- “Illegal refilling” includes filing/refilling with substances other than LPG to achieve correct net weight; refilling cylinders directly from LPG bulk storage tank trucks; unauthorized cross-filling; refilling from one LPG cylinder to another; refilling outside duly licensed LPG refilling plants; refilling cylinders that have defaced/tampered/illegible markings, noncompliance with PNS, are due for repair/requalification/scrappage or subject to recall/prohibition order, or by auto-LPG dispensing stations; unauthorized loading of LPG bulk storage tanks; and other filling/refilling in violation of Act requirements.
- The penalty section imposes administrative and criminal penalties tied to specific prohibited acts and repeat offenses, including escalating minimum fines and criminal imprisonment upon conviction for certain prohibited acts under Section 38.
- For violations under Section 38 (a)(1) (activities without required licenses/permits/certificates/registration), penalties escalate by offense count with administrative fines charged per day of operation at minimum amounts of P5,000 (first offense), P10,000 (second offense), and P20,000 (third offense).
- For violations under Section 38 (a)(2) (unauthorized engraving/manufacturing/seals and related acts), penalties escalate by offense count with minimum administrative fines per LPG pressure vessel or seal, confiscation, and additional sanctions (including suspension and closure), and with imprisonment ranges tied to conviction—minimum administrative fine levels include P25,000 (first offense), P50,000 (second offense), and P100,000 (third offense); imprisonment ranges include at least one (1) year but not more than three (3) years (second offense) and at least three (3) years and one (1) day but not more than six (6) years (third offense).
- For violations under Section 38 (b) (unauthorized transacting/manufacturing/selling empty cylinders or possessing LPG seals), penalties escalate with minimum administrative fines per LPG pressure vessel or seal and additional sanctions (closure and suspension and permanent disqualification for higher offenses) plus imprisonment ranges upon conviction, with first offense including a minimum administrative fine of P10,000 per pressure vessel or seal and second offense including a minimum administrative fine of P20,000 per pressure vessel or seal plus suspension; imprisonment upon conviction includes at least six (6) months but not more than one (1) year (second offense).
- Penalties for other subsections of Section 38 (including Section 38 (c) and Section 38 (d)–(f)) are likewise prescribed, with escalating penalties by offense count, but detailed figures for all subsections are not fully available in the provided material.