Executive Order No.
377
PROVIDING THE INSTITUTIONAL FRAMEWORK FOR THE ADMINISTRATION OF THE DOWNSTREAM OIL INDUSTRY
WHEREAS,
Republic Act No. 8180, otherwise known as the
“Downstream Oil Industry Deregulation Act of 1996”, provides for the deregulation
of all activities of the downstream oil industry in the country to foster a
competitive market and achieve the social policy objectives of fair prices and
adequate, continuous supply of environmentally-clean and high-quality petroleum
products;
WHEREAS,
the effective and efficient mechanism of this deregulated local downstream oil
industry involves the participation and coordination of various agencies as
required under the Rules and Regulations of the Act;
WHEREAS,
there is need to provide an institutional framework for the administration of
the industry in order to define and delineate the functions and
responsibilities of these agencies;
NOW,
THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Section
1. Delineation
of Agency Functions and Responsibilities.
– The functions and responsibilities of agencies are delineated as
follows:
1.1. Overall
Administration. The
Department of Energy (DOE) shall be the lead
agency in the administration of the deregulated local downstream oil
industry. It shall serve as the
oversight body which will integrate and coordinate the implementation of
policies and programs affecting the industry.
It shall be responsible for the overall monitoring of the downstream oil
industry, including the monitoring and publication of daily international oil
prices, to ensure the security and continuity of oil supply as well as the
compliance of petroleum businesses with quality, safety and environmental
standards and fair trade regulations.
1.2. Standards
Setting. The government shall prescribe the
appropriate quality, safety and environmental standards for petroleum products,
downstream facilities and processes as well as set guidelines governing fair
trade practices in the local downstream oil industry through the following
agencies:
a.
Department of Trade and Industry (DTI) shall
establish and update, in coordination with the
DOE,
the Philippine National Standard (PNS) on quality and safety of petroleum
products, including that of materials, equipment and facilities related to
petroleum products such as storage tanks, LPG refilling plants and cylinders,
valves and regulators; methods of requalification of cylinders; and codes of
practices for gas stations. Along with
this, the
DTI shall undertake the
following:
(1)
Enforce
the existing PNS in coordination with the
DOE,
LGUs and other concerned agencies and sectors;
(2)
Provide
measures to promote and ensure fair trade practices; and
(3)
Encourage
investments in the downstream oil sector.
b. Department of Science and Technology (DOST)
shall prescribe the calibration and verification intervals of all measuring
instruments used in petroleum products.
Towards this, the
DOST shall
initiate the following:
(1) Evaluate
and accredit the laboratories of the municipalities performing the calibration
and verification of tank lorries, road tankers, storage tanks, flow meters,
calibrating buckets, and weighing scales;
(2) Assist
the municipalities in calibrating these measuring instruments; and
(3) Calibrate
the reference standards of accredited laboratories, such as proving tanks,
provers, master meter and test weighs.
c.
Department of Environment and Natural Resources
(DENR) shall prescribe the environmental standards for petroleum products
and related activities thereto. In this
regard, the
DENR shall undertake the
following:
(1) Review,
evaluate and issue environmental compliance certificates to petroleum
businesses;
(2) Issue
permits to construct and operate petroleum facilities engaged in the recycling,
re-refining and re-processing of oil/petroleum products; and that for air and
water pollution, control installations and devices as may be required in
certain aspects of the downstream oil business pursuant to
RA
6969 (An Act to Control Toxic
Substances and Hazardous and Nuclear Wastes); and PD 984 (Pollution Control Law); and
(3) Monitor
emissions, effluents, and the compliance of petroleum businesses with
environmental standards and regulations, including the application of sanctions
for violations of rules and regulations thereof.
d. Department of Health (DOH) shall prescribe
the allowable level of toxicity to health as regards the emissions of
particulates and harmful substances accruing from the manufacturing, use and
combustion of petroleum products. In
line with this, the
DOH shall undertake
the following:
(1) Issue
the necessary health and safety guidelines on toxicity level;
(2) Provide
health advisory services, information and education related to the effects of
petroleum and petroleum products on humans; and
(3) Conduct
continuing studies on these effects towards determining measures to address
them.
e.
Department of Labor and Employment (DOLE)
shall set and enforce the standards for the protection and safety of workers
during their employment in any petroleum facility. In this regard, the
DOLE shall undertake the following:
(1) Enforce
the requirements for the operation of pressure vessels used in business and in
the issuance of certificate of safety of electrical and wiring system for
petroleum facilities;
(2) Develop
guidelines for handling and storage procedures in petroleum businesses to
ensure the safety of workforce and the public and general; and
(3) Formulate
and implement programs and information dissemination activities to enforce
workers’ and employers’ awareness on the health risks involved in storage,
handling and distribution of petroleum products, including safety measures in
dealing with emergency situations.
f.
Department of Transportation and Communication
(DOTC) shall set the standards for safety and roadworthiness/seaworthiness
of petroleum carriers, such as trucks, haulers, tankers and barges, including
their allowable gas emission levels. It
shall also set, in coordination with the
DOE,
the quality standards for fuels used in air transport. In addition, the
DOTC shall pursue the following:
(1)
Regulate
the routes of service, zones or areas of operation of tank trucks and other
petroleum transport facilities; and
(2)
Establish
fare rates for land and sea transport, taking into consideration the price in
the international market of oil.
1.3. Enforcement. The government shall enforce quality and
safety standards for petroleum products, carriers and downstream oil
facilities. As such, the following
agencies shall ensure the compliance of petroleum businesses with these
standards, including their strict adherence to fair trade regulations so as to
prevent cartelization and monopolies:
a. Department of Interior and Local Government (DILG)
shall, in coordination with national agencies, ensure the compliance of
petroleum businesses with prescribed quality, safety and environmental
standards on fuel, downstream oil facilities and labor to ensure the protection
of localities hosting petroleum facilities.
Towards this, the
DILG shall
undertake the following:
(1) Strictly
enforce the provisions of
PD 1185 (Fire Code of the Philippines) on safety
measures regarding the use, storage and handling of petroleum products and
downstream oil facilities; and
(2) Issue
corresponding permits for storage, conveyance, installation of tanks and
containers, including other petroleum facilities.
b. Department of Public Works and Highways (DPWH)
shall enforce the provisions of the National
Building Code to ensure the adherence of all downstream oil industry
infrastructure to safety standards thereto.
c. Philippine Economic Zone Authority (PEZA)
and the
Subic Bay Metropolitan Authority (SBMA)
shall enforce laws to prevent smuggling and dumping of petroleum products in
Special Economic Zones, including the rules and regulations of the
DOE with regard to the lifting of shipments
to or from the Zone.
d.
Department of Finance (DOF) shall be responsible
for the proper application of import tariff duties on petroleum and related
goods/products. In this regard, it shall
vigorously undertake the following:
(1) Collect
taxes, duties and other charges due;
(2) Enforce
the pertinent provisions of the
Oil Industry
Deregulation Act on the importation, exportation, re-exportation and
bunkering of petroleum products within the purview of the Tariff and Customs Code and related laws; and
(3)
Monitor
and enforce quality as well as the environmental standards on imported oil.
e. Department of Justice (DOJ) shall, in its
capacity as member of the
DOE-DOJ Task Force, adjudicate cases of
cartelization, overpricing and predatory pricing of petroleum products.
f. Department of National Defense (DND) shall
curb the illegal entry and smuggling of petroleum products and related
facilities into the country. It shall
also prevent and control maritime pollution through inspection of vessel design
and equipment, oil transfer procedures and operation, and communication
requirement.
g. Energy Regulatory Board (ERB) shall, upon the
implementation of the full deregulation phase of the downstream oil industry,
be responsible for fixing and regulating the rate of schedule or prices of
piped gas to be charged by duly franchised gas companies which distribute gas
by means of underground pipe system.
1.4. Policy
Support. The National Economic and Development Authority (NEDA)
shall conduct studies on the social, economic and financial impact of changes
in prices of petroleum products. These
shall serve as inputs to policy formulation for and review of the downstream
oil industry.
1.5. Transition
Pricing. During the transition phase of
deregulation, the pricing of petroleum products shall be the responsibility of
the
Energy Regulatory Board (ERB), in particular
the following:
a. Setting,
reviewing and resetting of the wholesale posted domestic prices of petroleum
products based on the approved automatic pricing formula;
b. Maintaining
the current margin of dealers and the rates charged by water transport operators,
haulers, fillers and pipeline concessionaires, and prescribing the formula
automatically setting the rates of the same; and
c. Issuing
the appropriate Order requiring payment of additional amount to be imposed on
petroleum products to augment the resources of the Oil Price Stabilization Fund
to persons or companies engaged in the business of importing, manufacturing or
marketing petroleum products, including those directly importing petroleum
products for their own use.
SEC.
2. Reportorial
Requirements. – The concerned
Departments and Agencies shall submit at least a quarterly report to the
DOE on their activities in discharging their
respective functions and responsibilities relative to the deregulated local
downstream oil industry, including developments thereto which may require
government action.
SEC.
3. Repealing
Clause. – All orders, issuances,
rules and regulations or parts thereof, inconsistent with this Order are hereby
repealed or modified accordingly.
SEC.
4. Effectivity. – This Order shall take effect immediately.
DONE
in the City of
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