Article 101p. 101

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

entity shall, for monitoring purposes, report to the DOE

his or its every importation/exportation: Provided, finally,

That all oil importations shall be in accordance with the

Basel Convention.

Section 6. Tariff Treatment. – (a) Any law to the contrary

notwithstanding and starting with the effectivity of this

Act, a single and uniform tariff duty shall be imposed

and collected both on imported crude oil and imported

refined petroleum products at the rate of three percent

(3%):

Provided,

however,

That

the

President of the

Philippines may, in the exercise of his powers, reduce

such tariff rate when in his judgment such reduction is

warranted,

pursuant

to

Republic

Act

No.

1937,

as

amended, otherwise known as the Tariff and Customs

Code: Provided, further, That beginning January 1, 2004

or upon implementation of the Uniform Tariff Program

under the World Trade Organization and ASEAN Free

Trade

Area

commitments,

the

tariff

rate

shall

be

automatically

adjusted

to

the

appropriate

level

notwithstanding the provisions under this Section.

(b) For as long as the National Power Corporation (NPC)

enjoys exemptions from taxes and duties on petroleum

products used for power generation, the exemption shall

apply to purchases through the local refineries and to

the importation of fuel oil and diesel.

Section 7. Promotion of Fair Trade Practices. – The

Department of Trade and Industry (DTI) and DOE shall

take all measures to promote fair trade and prevent

cartelization, monopolies, combinations in restraint of

trade, and any unfair competition in the Industry as

defined in Article 186 of the Revised Penal Code, and

Articles 168 and 169 of Republic Act No. 8293, otherwise

known as the "Intellectual Property Law". The DOE shall

continue to encourage certain practices in the industry

which continue to encourage certain practices in the

Industry

which

serve

the

public

interest

and

are

intended

to

achieve

efficiency

and

cost

reduction,

ensure continuous supply of petroleum products, and

enhance environmental protection. These practices may

include borrow-and-loan agreements, rationalized depot

and manufacturing operations, hospitality agreements,

joint tanker and pipeline utilization, and joint actions on

spill control and fire prevention.

The DOE shall monitor the relationship between the oil

companies (refiners and importers) and their dealers,

haulers

and

LPG

distributors

to

help

ensure

the

observance of fair and equitable practices and to ensure

the enforcement of existing contracts: Provided, That the

DOE shall conciliate and arbitrate any dispute that may

arise

with

respect

to

the

contractual

relationship

between the oil companies and the dealers, haulers and

LPG distributors involving the dealers' mark-up, the

freight rate in transporting petroleum products and the

margins of LPG distributors for the protection of the

public and to prevent ruinous competition: Provided,

further, That the arbitration award of the DOE shall be

subject to judicial review under existing law.

Section 8. Program to Encourage the Entry of New

Participants in the Industry. – The DOE, the Department

of

Foreign

Affairs

(DFA)

and

the

DTI

shall

jointly

formulate and establish a program that will promote the

entry of new participants in the Industry. Such program

shall, among others, include a strategic international

information

campaign

to

be

implemented

through

selected

embassies

and

consular

offices

of

the

Philippines.

This

program

shall

commence

implementation

after

three

(3)

months

from

the

effectivity of this Act.

In this regard, the DOE shall provide a "Philippine

Downstream Oil Industry Investment Guide" to new

industry participants and prospective participants. This

guide, shall, among others, contain:

(a) An introduction to the Philippine Downstream Oil

Industry

and

the

government's

unwavering

commitment to deregulation;

(b) The entry requirements;

(c) Information on the benefits and incentives for new

industry

participants

which shall specify: (i) all the

incentives and benefits they can enjoy, and (ii) the

procedural and substantive requirements needed for

entitlement; and

(d)

Such

other

information

the

DOE

may

deem

necessary to promote the entry of new participants.

Section 9. Incentives for New Investments. – To the

extent applicable, persons with new investments as

determined by the DOE and registered with the BOI in

refining,

storage,

marketing

and

distribution

of

petroleum

products,

shall

be

extended

the

same

incentives

granted

to

BOI-registered

enterprises

engaged in a preferred area of investments pursuant to

Executive

Order

No.

226,

otherwise

known

as

the

"Omnibus Investments Code of 1987".

Such incentives shall include:

(1) Income tax holiday;

(2) Additional deduction for labor expenses;

(3) Minimum tax and duty of three percent (3%) and

value-added tax (VAT) on imported capital equipment;

(4) Tax credit on domestic capital equipment;

(5) Exemption from contractor's tax;

(6) Unrestricted use of consigned equipment;

(7) Exemption from the real property tax on production

equipment or machineries;

(8) Exemption from taxes and duties on imported spare

parts; and

(9) Such other applicable incentives under Article 39 of

Executive Order No. 226.

Any provision of the law to the contrary notwithstanding,

the said incentives may be availed by persons with new

investments

for

a

period

of

five

(5)

years

from

registration with the BOI: Provided, however, That in the

storage,

marketing

and

distribution

of

petroleum

products,

only

the

investments

of

new

industry

participants shall be entitled to incentives provided in

the said Code. As used herein, "marketing of petroleum

products" shall include the establishment of gasoline

stations.

For this purpose, the industry shall be included in the

annual Investment Priorities Plan (IPP): Provided, That

nothing in herein contained shall preclude qualified

persons or entities as provided under the "Omnibus

Investments Code" from applying from or continue

enjoying incentives and benefits under the said Code.

Section 10. Promotion of Retail Competition. – To achieve

the social and policy objective of fair prices, facilitate the

attainment of a truly competitive product market in the

retail level, the DOE shall promote and encourage by

way

of

information

dissemination,

networking,

and

management/skills

training,

the

active

and

direct

participation of the private sector and cooperatives in

the

retailing

of

petroleum

products

through

joint

venture/supply

agreements

with

new

industry

participants for the establishment and operation of

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