Legal basis and regulatory framework
- Republic Act No. 8479 requires the DOE to promote entry of new industry participants, promote fair trade practices, monitor marketing processes and product quality, and stop operations of businesses selling petroleum products not complying with national quality standards.
- Batas Pambansa Blg. 33, as amended by Presidential Decree No. 1865, and its implementing rules prohibit and penalize specified acts inimical to public interest and national security, including illegal trading without license or authority from the DOE, hoarding, adulteration, and under delivery.
- The circular strengthens, clarifies, amends, and/or repeals existing LPG rules, including Department Circular No. 98-03-004 and the related rules implementing B.P. Blg. 33 as amended by P.D. 1865.
Policy intent and coverage
- The circular governs the LPG industry in response to increasing LPG industry participants and increasing unsafe and unlawful practices.
- The circular addresses unsafe and unlawful practices that cause loss of life and property, expose consumers to fire/safety/health/environment risks, deny proper LPG quality and quantity, deprive law-abiding players of fair competition, deprive government of unpaid taxes/fees/charges, and encourage unlawful sourcing and practices.
- The circular applies to and must be strictly complied with by all persons engaged or intending to engage in LPG activities including importing, refining, refilling, marketing, distributing, hauling/transporting, handling, storing, retailing, selling and/or trading of LPG (Section 2).
Core definitions and regulated actors
- Bureau of Fire Protection means “BFP.”
- Bureau of Product Standards means “BPS.”
- Brand Owner means the person owning the brand, name, logo, color, mark, and/or other distinction appearing on the LPG cylinder.
- Bulk Supplier means a refiner or importer that sells LPG in large quantities or wholesale.
- Canister or Cartridge means a portable pressure vessel/container designed or intended for LPG with water capacity less than that of an LPG cylinder.
- Consumer means any person who purchases LPG from a marketer, dealer, or retail outlet for its own consumption (in cylinders, through a pipeline system, or other means).
- Cylinder or LPG Cylinder means a portable pressure vessel/container for LPG with water capacity of one (1) liter to one hundred fifty (150) liters, or as prescribed under Philippine National Standards (PNS), designed for sale/transport/storage/household-commercial-industrial consumption.
- Dealer means a person engaged in selling or trading LPG in cylinders to consumers or retail outlets.
- Defective Cylinder means an uncertified, damaged, unsafe or dilapidated cylinder due to corrosion/pitting/dents/cuts/gouges/digs/bulges/leaks or similar defects making it unsafe or unfit or not allowed for distribution under guidelines set by DTI.
- DENR means the Department of Environment and Natural Resources created under Executive Order No. 192.
- DILG means the Department of the Interior and Local Government created under Republic Act No. 6975.
- DOE/Department means the Department of Energy created under Republic Act No. 7638, as amended.
- DTI means the Department of Trade and Industry, reorganized under Executive Order No. 292.
- Hauler means any person involved in transporting and delivering LPG in bulk or in cylinders.
- Importer means any person engaged in importation of LPG for processing/sale or own use.
- Industry Participant means any person engaged in any Industry Activity.
- Industry Activity means the business of importing, exporting, refining, refilling, marketing, distributing, hauling/transporting, handling, storing, retailing, selling and/or trading of LPG.
- IPO means the Intellectual Property Office established under Republic Act No. 8293 (Intellectual Property Code).
- LGU means local government unit; LGUs means local government units.
- LPG means liquefied petroleum gas consisting of commercial propane and/or commercial butane, or a mixture, with properties conforming to PNS, distributed/sold to consumers in cylinders (through pipeline systems, bulk storage tanks, or other distribution).
- Marketer means a person engaged in selling or trading LPG in bulk or retail under its own brand name.
- OIMB means the Oil Industry Management Bureau of the DOE.
- Pipeline System means a network of pipes/conduits for conveying LPG from the piped LPG provider to consumers.
- PNP means the Philippine National Police created under Republic Act No. 6975.
- PNS means Philippine National Standards.
- Qualified LPG Serviceman means an individual trained/qualified/certified by the DOE or any deputized agency, or who completed an approved training course for LPG servicemen in a government-recognized and -accredited training school.
- Refiller means a person engaged in refilling LPG into cylinders.
- Refilling Plant means an installation used for refilling LPG into cylinders with LPG bulk storage and refilling facilities.
- Refiner means a person who refines crude oil and other naturally occurring petroleum hydrocarbons through distillation, cracking, conversion and treatment.
- Repair means removal and replacement of parts/attachments of LPG cylinders or other corrective measures to restore cylinder fitness for refilling and distribution.
- Repairer means a person engaged in repairing LPG cylinders.
- Requalification means inspection/testing per PNS to determine acceptability for distribution and continuous use and for subsequent repair or scrappage where appropriate.
- Requalifier means a person engaged in LPG cylinder requalification.
- Retail Outlet means a person engaged in selling/trading directly to consumers LPG in cylinders supplied by a dealer or marketer.
- SCC means the Standards Compliance Certificate issued by the DOE to Industry Participants.
- Scrappage means destruction of defective LPG cylinders declared unfit by a requalifier/repairer or the DTI.
- Seal means the protective cover placed in the gas outlet of an LPG cylinder that must be broken/destroyed before LPG can flow out.
- Tare Weight means net weight of the LPG cylinder excluding its contents, engraved in the collar and painted in the body, expressed in kilograms in accordance with specifications prescribed by DOE and DTI.
- Uncertified Cylinder means an LPG cylinder that does not comply with PNS.
Standards Compliance Certificate (SCC) system
- No person shall engage in any Industry Activity without a valid SCC (Section 4).
- The DOE, through OIMB, issues an SCC upon complete submission of, and full compliance with, the documentary requirements under Section 6.
- OIMB is authorized to verify, validate, authenticate, and inspect all documents and information required from, given by, or obtained from the applicant for compliance with applicable laws and rules.
- A provisional SCC may be issued to a new LPG Industry Participant solely to obtain a mayoras/business permit, provided that an authenticated copy of the mayoras/business permit is submitted to OIMB within 30 days; otherwise the provisional SCC is deemed automatically revoked.
- Each SCC has a maximum validity of three (3) calendar (3) years from issuance and must be renewed not later than the end of March of the third year (Section 5).
- Each SCC is site/plant/outlet specific (Section 5).
- A holder of a valid SCC may transact business only with an LPG Industry Participant that likewise holds a valid SCC (Section 5).
Documentary, reportorial, posting, and denial rules
- Applications must be filed with OIMB; applications in the Visayas and Mindanao must be filed with the appropriate DOE field office or the DOE Central Office as convenient to the applicant (Section 6).
- Applications must be accomplished under oath and include specified information on the activity, business identity/contact, addresses of LPG establishments, and ownership/representation, plus such other DOE requirements (Section 6(a)).
- New/first-time applications must submit complete and valid supporting documents, and only such complete applications are accepted and processed (Section 6(b)).
- Supporting documents differ by Industry Participant type and include, as applicable: DTI/SEC registration, LGU zoning/locational clearance, barangay business clearance, LGU building permit or lease agreement, mayoras/business permit, Fire Safety Inspection Certificate, DENR Environmental Compliance Certificate, discharge permit where applicable, Dole/appropriate permits (including Permit to Operate Unfired Pressure Vessel from DOLE), product liability insurance certificate, plant layout, supply contracts, lists of vehicles, brand registration (for marketers), authorized-dealer listings, requalification/refilling plant certifications, design/operation standards/codes and notarized compliant statements (refiners/importers), engineer certification for refilling plants, and permits to import from Bureau of Customs/Bureau of Internal Revenue (for refiners/importers).
- Annual reports must include facilities/capacities and transport vehicles with plate numbers; suppliers and customers with volumes; supply contracts and refilling arrangements; qualified personnel/attendants; inventory of cylinders; schedules of cylinder acquisition/requalification/repair/scrappage; and applicable permits for new/additional/renovated/refurbished facilities or changes (Section 7(a)(1)).
- Monthly reports must include supply; demand/sales/consumption/throughput or refilling volume; and inventory (Section 7(b)).
- The DOE may require additional special reports (Section 7(c)).
- OIMB may deny issuance or renewal, or revoke or suspend an SCC, on grounds of failure to comply with Rule II; refusal to allow inspection; failure to pay DOE fines; or transacting with Industry Participants without valid SCC (Section 8).
- Every Industry Participant must prominently display its SCC in a strategic and appropriate location so customers and the public can see it; haulers must carry a copy of the SCC at all times in the transport vehicle (Section 9).
Minimum standards, logistics compliance, and safety
- Refilling entities must comply with minimum standards issued by DTI/DOE and any subsequent amendments, in addition to other circular provisions (Section 10).
- LPG transportation must comply with minimum standards as follows:
- For bulk transport: Fire Code of the Philippines/National Fire Protection Association Pamphlet 58 (Liquefied Petroleum Gas Code), Philippine Liquefied Petroleum Gas Association Safety Code, and applicable DOE issuances (Section 11(a)).
- For cylinder transport: applicable DOE issuances on the subject (Section 11(b)).
- Businesses selling/supplying/hauling/storing/handling/marketing/distributing LPG for automotive use must comply with DOE DC No. 2007-02-0002 and its future amendments (Section 12).
- LPG participants engaged simultaneously in several activities covered by the circular must comply with all requirements for each activity (Section 13).
Qualifications and duties of industry participants
- Bulk Suppliers (including oil companies/refiners, importers, and marketers) must have bulk LPG storage and loading facilities for tanker/barge or tank truck trailer and the necessary resources including adequate qualified licensed personnel, equipment, and fixed facilities to conduct operations and render efficient service (Section 14(a)).
- Refillers must have a refilling plant conforming to applicable PNS, appropriate weighing devices inspected/calibrated/sealed, trained qualified personnel proportional to operation size, at least one (1) licensed engineer with at least 3 years experience ensuring safety of operations/facilities, and qualified servicemen (Section 14(b)).
- Marketers must have fixed store space and storage facilities meeting safety standards; cylinders conforming to PNS and permanently marked with its brand; appropriate weighing devices inspected/calibrated/sealed by authorized government agency; qualified servicemen; and delivery vehicles conforming with the appropriate DOE circular (Section 14(c)).
- Dealers must have fixed store space and storage facilities meeting safety standards; cylinders conforming to PNS and permanently marked with its brand; appropriate weighing devices inspected/calibrated/sealed by authorized government agency; qualified servicemen; and delivery vehicles conforming with the appropriate DOE circular (Section 14(d)).
- Retail outlets must have fixed store space and storage facilities meeting safety standards; appropriate weighing devices inspected/calibrated/sealed by authorized government agency; and delivery vehicles conforming with the appropriate DOE circular where applicable (Section 14(e)).
Responsibilities include the following:
- Bulk Suppliers must ensure adequate and stable LPG supply in bulk and keep production/storage/receiving/loading equipment/facilities in safe operating conditions at all times (Section 15(a)).
- Refillers must:
- Fill cylinders accurately with the required exact net content and test weigh and conduct leak tests every cylinder before leaving the refilling plant premises (Section 15(b)(1)).
- Ensure cylinders are properly sealed before leaving the refilling plant premises (Section 15(b)(2)).
- Refill only cylinders complying with PNS (Section 15(b)(3)).
- Not refill single-trip and/or tin canister and cartridge (Section 15(b)(4)).
- Fill cylinders under their own brand and/or other brands only with prior written authorization or agreement from brand owners (Section 15(b)(5)).
- Conform with safe LPG handling practices under the circular (Section 15(b)(6)).
- Marketers/brand owners must:
- Carry its own brand of LPG (Section 15(c)(1)).
- Ensure adequate and timely supply for dealers or consumers (Section 15(c)(2)).
- Ensure correct weight of filled cylinders delivered to dealers/retail outlets (Section 15(c)(3)).
- Procure new cylinders only from reputable duly licensed manufacturers and use only cylinders with appropriate markings required by BPS (Globe Checkmarks for locally procured cylinders; ICC for imported cylinders) (Section 15(c)(4)).
- Emboss all new cylinders with its registered brand name (Section 15(c)(5)).
- Register with OIMB and exclusively use a distinguishing color and marking scheme for all its cylinders (Section 15(c)(6)).
- Register its seal and seal manufacturers/suppliers with OIMB (Section 15(c)(7)).
- Maintain and repair cylinders under its brand through accredited requalifiers and repairers in conformity with PNS (Section 15(c)(8)).
- Provide servicing, delivery, and technical assistance for dealers (Section 15(c)(9)).
- Conform with safe LPG handling practices under the circular (Section 15(c)(10)).
- Register with OIMB all vehicles used to transport LPG (Section 15(c)(11)).
- Notify OIMB of any price adjustment at least twenty-four (24) hours before effectivity (text message to the Director and Chief of the Oil Industry Competition Monitoring Division, and written notice on the first working day after effectivity) (Section 15(c)(12)).
- Issue official receipts for every transaction/sale/delivery (Section 15(c)(13)).
- Dealers must:
- Have a contract/agreement with brand owner or marketer (Section 15(d)(1)).
- Carry only the brand of LPG of its refiller/marketer (Section 15(d)(2)).
- Sell only LPG in cylinders with DOE-registered seals of its refiller/marketer (Section 15(d)(3)).
- Use weighing devices accurately measuring up to one-tenth (0.1) of one kilogram duly calibrated/sealed by authorized government agency (Section 15(d)(4)).
- Ensure correct weight of cylinders delivered to retail outlets/consumers (Section 15(d)(5)).
- Put up display and storage facilities within its area of operations (Section 15(d)(6)).
- Provide servicing, delivery, and technical assistance (Section 15(d)(7)).
- Conform with safe LPG handling practices (Section 15(d)(8)).
- Register with OIMB all vehicles used to transport LPG (Section 15(d)(9)).
- Issue official receipts after every transaction/sale/delivery (Section 15(d)(10)).
- Ensure its supplier issues official receipts after every transaction/sale/delivery (Section 15(d)(11)).
- Ensure cylinders conform to minimum standards prior to acceptance from suppliers (Section 15(d)(12)).
- Retail outlets must:
- Sell only authorized brands by virtue of agreement with appointing dealers (Section 15(e)(1)).
- Sell only LPG in cylinders with DOE-registered seals of refillers and marketers (Section 15(e)(2)).
- Use weighing devices measuring up to one-tenth (0.1) of one kilogram, calibrated/sealed by authorized government agency (Section 15(e)(3)).
- Request a qualified LPG serviceman to render services to end-users (Section 15(e)(4)).
- Install/provide fire extinguishers and printed materials/posters showing procedures to prevent/respond to LPG accidents (Section 15(e)(5)).
- Conform with safe LPG handling practices (Section 15(e)(6)).
- Issue official receipts and ensure supplier-issued receipts are issued for every transaction/sale/delivery (Sections 15(e)(7)–(8)).
- Ensure cylinders conform to minimum standards prior to acceptance from suppliers (Section 15(e)(9)).
Additional obligations:
- Refillers, marketers, and dealers must periodically check LPG sold by their respective dealers/retail outlets at least once every ninety (90) days to verify compliance with LPG content requirements and verify dealer/retail outlet weighing devices are calibrated and sealed in accordance with the circular; results must be recorded and made available to DOE inspectors upon demand (Section 16(a)).
- Bulk transactions must be covered by official receipts bearing specified information: registered name of seller, seller address, date, quantity/volume, plate number of transporting trucks or registered name of transporting barge, total price, and other DOE-prescribed information (Section 16(b)(1)).
- Cylinder-to-consumer transactions must be covered by official receipts bearing specified information: registered name of seller, seller address, date, brand, cylinder serial number, net weight in cylinder, unit price, total price, and other DOE-required information (Section 16(b)(2)).
- Transfers between Industry Participants must be covered by official receipts or other written instruments with applicable information, and duplicate receipt copies must be made available for OIMB verification by inspectors (Section 16(b)(3)).
Cylinder ownership, insurance, maintenance, and returns
- The brand owner whose permanent mark appears on the LPG cylinder is presumed the owner regardless of custody/possession party, marking/stamping condition, and compliance status with standards, absent unequivocal proof (Section 17).
- The brand owner/cylinder owner must ensure cylinders comply with required quality and safety standards before release for sale and distribution (Section 17).
- Receipt by the DOE of a verified notice/report from the cylinder owner regarding lost, stolen, or missing cylinders serves as prima facie evidence relieving the owner from the obligation to ensure quality and safety; such relief may be rebutted by contrary evidence (Section 17).
- All cylinder owners/brand owners must keep cylinders in safe, clean, serviceable condition consistent with industry safety codes and must have cylinders conform with PNS 03 (Section 18).
- All brand owners must carry product liability insurance from insurance companies duly licensed and authorized by the Insurance Commission to answer for damages/liability from unsafe LPG cylinder conditions (Section 19).
- Brand owners must replace or refund returned cylinders through authorized dealers or retail outlets pursuant to DOE guidelines coordinated with the DTI (Section 20).
Monitoring, inspection, and impoundment authority
- The OIMB and DOE Field Office inspectors must monitor and inspect Industry Participants regularly to ensure compliance with applicable DOE rules and regulations (Section 21).
- OIMB and DOE Field Offices may take custody or impound LPG cylinders found violating DOE laws/rules/regulations for public welfare and evidence until final disposition in accordance with law or applicable administrative/civil/criminal proceedings (Section 22).
- Monitoring/inspection operations may be conducted with assistance of other government agencies such as the Philippine National Police, National Bureau of Investigation, or similar enforcement agencies to provide security to life and property during inspection and during confiscation/transport of cylinders to the impounding area (Section 22).
Consumer safety and informational signs
- LPG establishments/outlets must prominently display safety and informational signs in strategic and appropriate locations:
- A Price Display Board with updated prices for each LPG brand and cylinder size sold/offered for sale, with numeric entries of at least six (6) inches in height (Section 23(a)).
- “No Smoking” signs (Section 23(b)).
- “No open flame within three (3) meter radius” sign (Section 23(c)).
- Other safety signs as may be required by DOE, other government agencies, and relevant LGUs (Section 23(d)).
Prohibited acts and evidentiary presumptions
- Illegal Trading is defined to include, among others:
- Conducting business without an SCC (Section 24(a)).
- Failing or refusing to post the SCC (Section 24(b)).
- Transacting with an Industry Participant without a valid SCC (including selling/distributing to those with expired/suspended/revoked SCC) (Section 24(c)).
- Refusing/preventing/obstructing inspection of premises and records (Section 24(d)).
- Selling LPG in cylinders not conforming with PNS on manufacture/requalification/repair, including without required markings, substandard cylinders as defined by PNS, wrong/misleading tare weight stamping, and LPG in inappropriate containers (Section 24(e)).
- Failing to comply with DOE-required standards for the specific activity, including non-compliance with mandatory safety design requirements for refilling plants, equipment, depots, centralized LPG distribution systems, and similar facilities (Section 24(f)).
- Failing to comply with weighing device requirements (Section 24(g)).
- Illegal possession and/or use of unregistered and/or inappropriate LPG cylinder seal by persons other than the brand owner and its authorized refiller/s (Section 24(h)).
- Illegal possession of LPG cylinder seals, including seals already used in LPG cylinders, without authority from the cylinder owner or authorized refiller (Section 24(i)).
- Sale/distribution of LPG-filled cylinders without seals, with tampered seals, or with seals not belonging to the brand owner (Section 24(j)).
- Sale of LPG in single-trip (non-refillable) container/canister previously filled with butane or not designed/intended for refilling due to non-compliance with PNS or not certified/allowed by DTI (Section 24(k)).
- Illegal storage: storing LPG in bulk without obtaining an SCC (Section 24(l)).
- Pilferage of LPG (Section 24(m)).
- Tampering of LPG cylinders and similar acts by any person other than the LPG cylinder owner, including destroying/tampering/altering/modifying/stamping/labeling wrong or misleading information/marks by changing valves, repainting, and re-labeling (Section 24(n)).
- Overloading: loading/transporting LPG cylinder quantities greater than vehicle rated capacity or loading/transporting in a manner endangering passengers or the public (Section 24(o)).
- Hoarding: accumulating LPG beyond normal inventory and unreasonably limiting/refusing disposal/sale/distribution to the general public before price increases or in tight supply, even if buyers can pay in cash (Section 24(p)).
- Hoarding usual inventory is reckoned from the third (3rd) month immediately preceding discovery if the participant has been engaged for at least three (3) months; otherwise it is reckoned from the time business started (Section 24(p)).
- Hoarding is established by prima facie evidence if stocks are fifty percent (50%) higher than usual inventory and the participant unreasonably limits/refuses/fails to sell to the general public at discovery (Section 24(p)).
- Illegal Refilling includes refilling in any of the following circumstances:
- Refilling by any person/entity other than the brand owner, unless express permission exists via written contract or similar instrument (Section 25(a)).
- Refilling with a different brand/trademark/trade name/registered business name other than that indicated on the cylinder (“pirate filling” or “cross-filling”) (Section 25(b)).
- Refilling without embossed markings/indications of brand/trade name, or with defaced/tampered/illegible markings contrary to mandatory labeling/stamping requirements (Section 25(c)).
- Refilling cylinders due for repair/requalification/scrappage, or subject to DOE recall/prohibition orders (Section 25(d)).
- Filling directly from LPG tank trucks without approved filling machines (Section 25(e)).
- Refilling from one LPG cylinder to another without prescribed equipment (Section 25(f)).
- “Backyard refilling” outside properly designed LPG refilling plants (Section 25(g)).
- Filling with non-LPG substances/materials to achieve correct net weight (Section 25(h)).
- Refilling LPG for household/commercial use by Auto-LPG dispensing stations (Section 25(i)).
- Refilling into single-trip/tin canister/cartridge not designed/intended for LPG or not complying with PNS or, absent PNS, without express consent/approval/conformity of DTI (Section 25(j)).
- Any other refilling violating mandatory requirements/prescribed standards (Section 25(k)).
- Unauthorized loading of bulk LPG tanks in industrial accounts (Section 25(l)).
- Underfilling is prohibited where the net quantity offered for sale/sold/transferred/delivered/filled is less than required cylinder content by DOE and/or the net content marked in the cylinder (Section 26).
- Underfilling has prima facie evidence where seals are broken/tampered/absent/removed or where cylinders containing less than required LPG quantity are not identified/set apart or removed from sales area by dealers/retail outlets (Section 26).
- Net content rules:
- For cylinders with water capacity of twenty-one (21) liters to twenty-nine (29) liters, the net LPG content at refilling plants must not be less than 11.0 kilograms (Section 26).
- When sold to the consumer, net quantity must not be more than three tenths (0.3) of one kilogram less than 11.0 kilograms (Section 26).
- A shortage of more than three tenths (0.3) of one kilogram per cylinder constitutes underfilling (Section 26).
- Allowable deviation for other cylinder sizes cannot exceed three tenths (0.3) of one kilogram from indicated net weight (Section 26).