Article 104p. 104

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

hundred million pesos (P 2,900,000,000.00) to cover

increases in the prices of petroleum products, except

premium gasoline, during the Transition Phase over the

prices prevailing as of the date of the effectivity of this

Act. The "Reserve Control Account" refers to a lump sum

collation

of

reserve impositions deducted from the

appropriations approved by Congress for the operation

of the government and the implementation of projects

and programs.

Section 18. Automatic Oil Pricing Mechanism. – To enable

the

domestic

price

of

petroleum

products

to

approximate and promptly reflect the prices of oil in the

international market, an automatic pricing mechanism

shall be established. To this end, the following laws are

hereby amended:

(a) Paragraph (a), Section 8 of Republic Act No. 6173, as

amended by Section 3 of Executive Order No. 172, to read

as follows:

"SEC. 8. Powers of the Board Upon Notice and Hearing. –

The Board shall have the power:

"(a) To set the wholesale posted price of petroleum

products during the Transition Phase.

"For this purpose and for the protection of the public

interest, the Board shall, after due notice and hearing, at

which any consumer of petroleum products and other

parties who may be affected may appear and be heard,

and within one (1) month after the effectivity of this Act,

approve a market-oriented formula to determine the

WPP of petroleum products based solely on the changes

of either the Singapore Posting of refined petroleum

products, the SIP or the crude landed cost.

"Thereafter,

the

Board

shall

at

the

proper

times

automatically adjust the WPP of petroleum products

based on the approved formula, through appropriate

orders, without the need for notice and hearing.

"The Board shall, on the dates of effectivity of the

automatic oil pricing formula, the initial WPP or the

adjusted WPP, publish the same, together with the

corresponding

computation

in

two

(2)

national

newspapers of general circulation."

(b) Paragraph 1 of Letter of Instruction No. 1441, to read as

follows:

"1. To review and reset the prices of domestic petroleum

products up or down as necessary on or before the third

Monday of each month to reflect the new WPP of

refined petroleum products based on the approved

automatic pricing formula."

(c) Paragraph 2 of Letter of Instruction No. 1441 is hereby

deleted. In lieu thereof a new paragraph is inserted to

read as follows:

"2. The price adjustment shall be reflected automatically

in the approved WPP of each petroleum product."

(d) The provisions of Section 3 (a) and (c) and Section 5 of

Executive Order No. 172 to the contrary notwithstanding,

the Board shall, during the Transition Phase, maintain

the current margin of dealers and rates charged by

water

transport

operators,

haulers

and

pipeline

concessionaires. Depending on the basis of the APM, the

Board shall, within one (1) month after the effectivity of

this Act and after proper notice and full public hearing,

prescribe a formula which will automatically set the

margins of marketers and dealers, and the rates charged

by

water

transport

operators,

haulers

and

pipeline

concessionaires: Provided, That such formula shall take

effect

simultaneously

with

the

effectivity

of

the

automatic oil pricing formula. Thereafter, the Board shall

set the said margins and rates based on the approved

formula without the necessity for public notice and

hearing.

The Board shall, on the day of the effectivity of the

aforesaid formula, publish in at least two (2) newspapers

of general circulation the mechanics of the formula for

the information of the public.

CHAPTER VI Full Deregulation Phase

Section 19. Start of Full Deregulation. – Full deregulation

of the Industry shall start five (5) months following the

effectivity of this Act: Provided, however, That when the

public interest so requires, the President may accelerate

the start of full deregulation upon the recommendation

of the DOE and the Department of Finance when the

prices of crude oil and petroleum products in the world

market are declining and the value of the peso in

relation to the US dollar is stable, taking into account the

relevant trends and prospects: Provided, further, That

the

foregoing

provisions

notwithstanding,

the

five

(5)-month Transition Phase shall continue to apply to

LPG, regular gasoline, and kerosene as socially-sensitive

petroleum products and said petroleum products shall

be covered by the automatic pricing mechanism during

the said period.

Upon

the

implementation

of

full

deregulation

as

provided

herein,

the

Transition

Phase

is

deemed

terminated and the following laws are repealed:

(a) Republic Act No. 6173, as amended;

(b) Section 5 of Executive Order No. 172, as amended;

(c) Letter of Instruction No. 1431, dated October 15, 1984;

(d) Letter of Instruction No. 1441, dated November 15,

1984;

(e) Letter of Instruction No. 1460, dated May 9, 1985;

(f) Presidential Decree No. 1889; and

(g)

Presidential

Decree

No.

1956,

as

amended

by

Executive Order No. 137:

Provided, however, That in case full deregulation is

started by the President in exercise of the authority

provided

in

this

Section,

the

foregoing

laws

shall

continue to be in force and effect with respect to LPG,

regular gasoline and kerosene for the rest of the five

(5)-month period.

Section 20. Jurisdiction on Pricing of Piped Gas. – Section

3 of Executive Order No. 172, is hereby amended to read

as follows:

"SEC. 3. Jurisdiction, Powers and Functions of the Board.

– The Board shall, upon proper notice and hearing, fix

and regulate 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."

CHAPTER VII Final Provisions

Section

21.

OPSF Balance. – All outstanding claims

against OPSF as of the effectivity of this Act, subject to

the

existing

auditing

rules

and

regulations

of

the

Commission on Audit (COA), shall be considered as

accounts payable of the National Government. For this

purpose, and any law to the contrary notwithstanding,

the

reimbursement

certificates

issued

by

the DOE

covering the said outstanding claims shall be honored

and accepted by the Bureau of Customs and the Bureau

© 2018 Compiled by RGL

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