Letter of Instructions No. 969
The Treasurer of the Philippines
Uncertainties in the crude supply situation brought about essentially by the
disruption of supply from traditional crude oil sources have led to the
unilateral imposition, starting in March 1979, by individual members of the
Organization of Petroleum Exporting Countries (OPEC), of crude premium or
surcharge over and above the generally-agreed crude prices set by the
organization in its December 1978 meeting in Abu-Dhabi. As approved in its
subsequent meeting in June 1979 in Geneva, Switzerland,
OPEC imposed general
crude price increases effective July 1, 1979, which brought the general crude
prices to 134.94% of January 1, 1979 price levels. In addition, the
organization allowed the individual member countries to add premium or surcharge
to their crude prices as necessitated by market conditions.
Under its orders dated March 22, 1979, July 31, 1979, and August 14, 1979, the
Board of Energy (BOE) has provided for the recovery of crude surcharges through
the mechanism of a special levy on petroleum payable to the Special Fund created
pursuant to Section 8 (j) of R.A. 6173, as amended, and the subsequent
reimbursement of oil companies of actual and necessary cost increases as a
result of individual country crude price and adjustments. In line with the
foregoing mechanism, the amount of P 255 million was set aside from the said
Special Fund by virtue of Letter of Instruction No. 842 to reimburse oil
companies for actual crude surcharges.
To continue the implementation of the aforementioned reimbursement scheme in accordance with the foregoing BOE orders, the Ministry of Energy is hereby authorized to reimburse the oil companies for duly documented and validated crude surcharges by means of issuance of reimbursement certificates which are deductible from the oil companies’ monthly remittances to the said Special Fund for crude equalization fund and remittances corresponding to rates prevailing as of March 21, 1979. For this purpose, an additional P 300 million is hereby set aside from the said Special Fund to reimburse oil companies for actual crude surcharges. The Ministry of Energy is further authorized to promulgate the necessary implementing rules to carry into effect the objective of this Letter of Instructions.
The Ministry of Energy is directed to submit to me periodic reports on reimbursement certificates actually issued to the oil companies for crude surcharges incurred.
This Letter of Instruction shall take effect immediately.
Done in the City of Manila, this 15th day of December, in the year of our Lord, Nineteen Hundred and Seventy-Nine.
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