Department
Circular No. 2003-01-001
Guidelines Implementing the Minimum Inventory
Requirements of Oil Companies and Bulk Suppliers As Provided Under
Executive
Order No. 134
Pursuant to
Executive Order No. 134 issued by the President of the
Republic of the Philippines on 14 October 2002,
Republic Act
No. 7638, otherwise known as an “Act Creating the Department of Energy” and
Republic Act No. 8479, otherwise known as the “Downstream
Oil Industry Deregulation Act of 1998”, the
Department
of Energy hereby adopts the following guidelines to implement the minimum
inventory requirement of all Oil Companies and Bulk Suppliers operating in the
country, to ensure a continuous, adequate and stable supply of Petroleum Crude
Oil and Products in cases where domestic and international events threaten or
restrict the supply of Petroleum Crude Oil and Products to the Philippines such
as, but not limited to, terrorist attacks, armed conflict in the Middle East
and in other regions from which the Philippines draws or transits its supply of
Petroleum Crude Oil and Products, and other similar events.
ARTICLE
I – GENERAL PROVISIONS
SECTION
1. Title
These
guidelines shall be known as the “Implementing Guidelines for the Minimum
Inventory Requirements of Petroleum of Oil Companies and Bulk Suppliers” and
shall be hereafter referred to as the “Guidelines”.
SECTION
2. Scope and Coverage
These
Guidelines shall apply to all Oil Companies and Bulk Suppliers engaged in any
activity of the Downstream Oil Industry in the
SECTION
3. Definition of Terms
For
purposes of these Guidelines the following terms shall have the following
meanings:
a. Bureau refers to the Energy Industry
Administration Bureau of the
Department of
Energy or its successor;
b. Bulk plant/terminal/depot refers to an
intermediate distribution facility where delivery of Petroleum Products to and
from the facility is undertaken by tank trucks, tankers/barges, pipes and other
modes of transport in large quantities;
c. Bulk Sales/Supply refers to cargoes
which are transported through tank trucks, tankers/barges, pipes and other
modes of transport in large quantities;
d. Bulk Supplier refers to any Person engaged in
the sale of Petroleum Products in bulk sourced through direct importation;
e.
BPS
means the
Bureau of Product Standards
of the
Department of Trade and Industry;
f. Crude Oil refers to oil in its natural state
before the same has been refined or otherwise treated, and excludes water,
bottoms, sediments and foreign substances;
g. Days Supply refers to the equivalent number of
days of in-country stocks of Petroleum Crude Oil and Products based on the
average daily sales or liftings for the past six (6) months;
h.
DOE
refers to the
Department of Energy of the
Republic of the
i. Downstream Oil Industry refers to the
business of importing, exporting, reexporting, shipping, transporting,
processing, refining, storing, distributing, marketing and/or selling of Crude
Oil, gasoline, diesel, Liquefied Petroleum Gas (LPG), kerosene and other
Petroleum Products;
j. Liquefied Petroleum Gas or LPG refers to
commercial propane gas or commercial butane gas or a mixture of the said two
gases, with properties conforming to the specifications set by the BPS;
k. Minimum Inventory Level refers to the minimum
level of supply of Petroleum Crude Oil and Products to be stored by Oil
Companies and Bulk Suppliers in their respective bulk plants, terminals or depots
and stocks in-transit within the country,
l. Oil Company refers to any Person who
refines/manufactures/processes and/or imports/exports and stores, distributes
and sells Petroleum Products;
m. Person refers to any person, whether natural
or judicial, who is engaged in any or a combination of activities in the
Downstream Oil Industry;
n. Petroleum refers to the naturally occurring
mixture of compounds of hydrogen and carbon with a small proportion of
impurities and shall include any mineral oil, petroleum gas, hydrogen gas,
bitumen, asphalt, mineral wax and all other similar or naturally associated
substances, with the exception of coal, peat, bituminous shale and/or other
stratified mineral fuel deposits;
o. Petroleum Products refers to products formed
in the course of refining crude petroleum through distillation, cracking,
solvent refining and chemical treatment coming out as primary stocks from the
refinery such as, but not limited to: LPG, naphtha, gasolines, solvents,
kerosene, aviation fuels, diesel oils, fuel oils, waxes and petroleums,
asphalts, bitumens, coke and refinery sludges, or such refinery petroleum
fractions which have not undergone any process or treatment as to produce
separate chemically-defined compounds in a pure or commercially pure state and
to which various substances may have been added to render them suitable for
particular uses; Provided, that the
resultant product contains not less than fifty percent (50.0 %) by weight of
such Petroleum Products;
p. Refiner refers to any Person who locally
refines Petroleum through distillation, conversion and treatment thereof.
ARTICLE
II – MINIMUM INVENTORY REQUIREMENTS
SECTION
4. Application of Minimum Inventory Requirements
In cases
where domestic and international events may threaten or restrict the supply of
Petroleum Crude Oil and Products to the Philippines such as, but not limited to
terrorist attacks, armed conflict in the Middle East and in other regions from
which the Philippines draws or transits its Petroleum Crude Oil and Products
supply, and other similar events, the Secretary of Energy shall require Oil
Companies and Bulk Suppliers to maintain a minimum inventory of Petroleum Crude
Oil and Products, to ensure the continuous, adequate and stable supply of
Petroleum Crude Oil and Products in the country.
SECTION
5. Minimum Inventory Level
All Oil
Companies, except Refiners operating in the country, and Bulk Suppliers shall
maintain a minimum inventory equivalent to fifteen (15) Days Supply of Petroleum
Products, excluding LPG, which shall have to be maintained at seven (7) Days
Supply.
Refiners on
the other hand, shall maintain a minimum inventory equivalent to thirty (30)
Days Supply consisting of Petroleum Crude Oil and refined Petroleum Products.
The
required minimum inventories shall include Petroleum Crude Oil and product
stock, on shore and en route to stockpoints within the country, but shall
exclude importations still in-transit to the country during the period
specified in Section 7 of these Guidelines.
SECTION
6. Product Type/Mix to be Stocked
For
purposes of Section 4 of these Guidelines, the type and mix of Petroleum
Products to be stocked may vary for each Oil Company and Bulk Supplier; Provided, that priority shall be given
to the stockpiling of diesel and gasoline which are used, in the transport
sector, LPG for household consumption and fuel oil for power generation.
SECTION
7. Commencement of Minimum Inventory Level
Requirement and Duration of Compliance
The Minimum
Inventory Level requirement shall commence upon a determination by the
Secretary of Energy of the existence of circumstances enumerated in Section 4
of these Guidelines that would require its imposition. The requirement of Minimum Inventory Level
shall continue until such tune that the Secretary of Energy makes a
determination that the circumstance/s warranting the application thereof no
longer exists. The Oil Companies and
Bulk Suppliers shall be notified in writing of the commencement and termination
of the Minimum Inventory Level requirement.
ARTICLE
III – MONITORING
SECTION
8. Reportorial Requirements
To ensure
full compliance with
E.O. 134 and these Guidelines, and
for
DOE’s effective monitoring of the
country’s inventory level of supply of Petroleum Crude Oil and Products, all
Oil Companies and Bulk Suppliers, shall submit to the Bureau weekly reports,
prepared under oath, of their inventory on a per crude and per product basis
including their actual and projected importations and local purchases and such
other matters required for compliance with these Guidelines for the duration to
be specified by the Secretary of Energy pursuant to Section 6 of these
Guidelines.
The Bureau
shall conduct, and the Oil Companies and Bulk Suppliers shall cooperate with,
periodic inventory checks on the storage facilities, bulk plants, terminals or
depots to reconcile actual submissions.
ARTICLE
IV – FINAL PROVISIONS
SECTION
9. Penalties
Failure to
comply with the provisions of these Guidelines shall constitute a violation of
Section 12 of
Republic Act No. 8479, in relation to
Section 15 of
Republic Act No. 8479, and Section 5(c) of
Republic Act No. 7638, and shall be punishable in
accordance therewith.
SECTION
10. Effectivity
These
Guidelines shall take effect upon complete publication in a newspaper of
general circulation.
Issued in
VINCENT S. PÉREZ
Secretary
Republic
of the
DEPARTMENT
OF ENERGY
C E
R T I F I C A T I O N
TO WHOM IT
MAY CONCERN:
THIS IS TO
CERTIFY that, as shown by our records, Department Circular No. DC
2003-01-001, entitled: “GUIDELINES IMPLEMENTING THE MINIMUM INVENTORY
REQUIREMENTS OF OIL COMPANIES AND BULK SUPPLIERS AS PROVIDED UNDER EXECUTIVE
ORDER NO. 134,” issued on January 20, 2003 was published in the 22
January 2003, Wednesday issue of Today.
Section
10 of said Department
Circular provides that it shall take effect upon complete publication in a
newspaper of general circulation.
Pursuant to this provision, Department Circular No. DC 2003-01-001,
therefore, took effect on 22 January 2003.
THIS IS
TO CERTIFY FURTHER that,
in compliance with Section 3, Chapter 2, Book VII of the Administrative Code of
1987 (E.O. 292), which provides:
“SEC. 3. Filing. – (1) Every agency shall file with the
University of the
Rules in
force on the date of effectivity of this Code which are not filed within three
(3) months from the date shall not thereafter be the basis of any sanction
against any party or persons.”
three (3)
certified copies of the Department Circular issued on 20 January 2003 had
been filed with the
University of the
Philippines
DONE, this
30th day of January, 2003, at the Department of Energy,
MANUEL
L. OCAMPO
OIC, Office
of the Director
Information
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