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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 1206
PRESIDENTIAL DECREE NO. 1206 -
CREATING THE DEPARTMENT OF ENERGY
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chanroblesvirtualawlibrary
WHEREAS,
the world-wide energy situation indicates that an adequate supply of
energy resources for the country's needs has become of long-term and
vital national concern considering that the adequacy of energy
resources is indispensable to accelerated economic growth;chanroblesvirtualawlibrary
WHEREAS, the Philippines has embarked on a multi-dimensional response
to the energy crisis, designated to achieve the national objective of
self-reliance and independence on the sourcing of energy through
intensive exploration and development of indigenous energy resources,
and through the judicious conservation and efficient utilization of
energy; chanroblesvirtualawlibrary
WHEREAS, there is critical need to further rationalize the country's
total energy resource development program in order to accelerate its
self-reliance and conservation program relative to energy resource on
an integrated and comprehensive basis; and
WHEREAS, meeting the country's energy requirements has become an
integral and regular function of the government, vast enough such that
no less than an agency with the departmental status is required which
shall serve as the government's primary instrumentality in the
formulation and implementation of its energy resource development
program on a unified and coordinated approach. chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
order and decree the following to be part of the law of the land:cralaw:red
Section 1. Declaration of Policy. — It is declared
policy of the state to ensure a continuous and adequate supply of
energy with the end in view of ultimately achieving self-reliance in
the country's energy requirements, through intensive exploration and
development of indigenous energy resources, and through the judicious
conservation and efficient utilization of energy consistent with the
country's accelerated economic growth and taking into consideration the
significant and continuing participation of the private sector in the
various areas of energy resource development.
Section 2. Creation of a Department of Energy. —
Pursuant to the abovementioned policy, there is hereby created a
Department of Energy, hereinafter referred to as the Department, which
shall, among others formulate and implement the government's policies,
plans and programs on energy resources development.
Section 3. Authority and Responsibility. — The
authority and responsibility for the exercise of the powers and the
discharge of the functions of the Department shall be vested in a
Secretary of Energy, hereinafter referred to as the Secretary. The
Secretary shall be assisted by one Undersecretary.
Section 4. Powers and Functions. — The Department
shall have the following functions:cralaw:red
a. Formulate policies, consistent with Section 1
above and pertinent national guidelines, and coordinate all activities
of the government relative to the exploration, exploitation,
development, extraction, importation, exportation, transport,
marketing, distribution, and storage of energy resources from fossil
fuels such as petroleum, coal, natural gas and gas liquids; nuclear
fuel resources; geothermal resources; and non-conventional existing and
potential forms of energy resources; chanroblesvirtualawlibrary
b. Establish and administer a comprehensive and
integrated program for the exploration, exploitation, development,
extraction, importation, exportation, transport, marketing,
distribution, and storage of fossil, nuclear, geothermal and
non-conventional forms of energy resources; chanroblesvirtualawlibrary
c. Encourage, guide and where necessary, regulate
such business activity relative to the exploration, exploitation,
development, extraction, importation, exportation, transport,
marketing, distribution and storage of fossil, nuclear, geothermal, and
non-conventional forms of energy resources and prescribe and collect
fees in the exercise of such power; chanroblesvirtualawlibrary
d. Assess, review and provide direction to, in
coordination with concerned government agencies, energy research and
development programs including identification of sources of energy and
determination of their commercial feasibility for development;chanroblesvirtualawlibrary
e. Exercise the powers and functions of the abolished
Energy Development Board and Power Development Council under Section
11(a) and (b) of this Decree;chanroblesvirtualawlibrary
f. Formulate such rules and regulations as may be
necessary to implement the objectives and provisions of this Decree; and
g. Exercise all powers necessary or incidental to
attain the objectives of this Decree.
Section 5. Department Proper. — The Department shall
have an Administrative Service, a Financial and Management Service, and
a Planning Service.
The Administrative Service shall be responsible for providing the
Department with services relating to personnel, legal assistance,
information, records, supplies, equipment, collection and
disbursements, security and custodial work.
The Financial and Management Service shall be responsible for providing
the Department with staff advice and assistance on budgetary,
financial, and management improvement matters.
The Planning Service shall be responsible for providing the Department
with services relating to planning, programming and project
development, including for the formulation of short and long term
energy including power development policies and or international
developments. It shall also review and evaluate energy development and
utilization of non-conventional forms of energy resources.
Section 6. Bureau of Energy Development. — There is
created in the Department a Bureau of Energy Development, hereinafter
referred to in this Section as the Bureau, which shall have the
following powers and functions, among others:cralaw:red
a. Administer a national program for the
encouragement, guidance, and whenever necessary, regulation of such
business activity relative to the exploration, exploitation,
development, and extraction of fossil fuels such as petroleum, coal,
natural gas and gas liquids; nuclear fuel resources; geothermal energy
resources; and non-conventional forms of energy resources;chanroblesvirtualawlibrary
b. Undertake by itself or cause the undertaking by
other institutions, government or private, of intensive research and
development to achieve the country's self-reliance and conservation
program relative to energy resources;chanroblesvirtualawlibrary
c. Exercise such powers and functions of the Energy
Development Board as shall hereafter be transferred to it; and
d. Promulgate such rules and regulations as may be
necessary, subject to the approval of the Secretary, for the efficient,
effective and economical exercise of its power and functions.
The decisions, orders, resolutions or actions of the Bureau may be
appealed to the Secretary whose decisions are final and executory
unless appealed to the President.
Section 7. Bureau of Energy Utilization. — There is
created in the Department a Bureau of Energy Utilization, hereafter
referred to in this Section as the Bureau, which shall have the
following powers and functions, among others:cralaw:red
a. Administer a national program for the
encouragement, guidance and, where necessary, regulation of such
business activities as importing, exporting, storing, shipping,
transporting, refining, processing, marketing, and distributing of
energy resources. Energy resources mean any substance or phenomena
which by itself or in a combination with others, or after processing or
refining or the application to it of technology, emanates, generates or
causes the emanation or generation of energy, such as but not limited
to petroleum or petroleum product, coal, marsh gas, methane gas,
geothermal and hydroelectric sources of energy, uranium and other
similar radioactive minerals, solar energy, tidal power, as well as
non-conventional existing and potential sources.
b. Exercise such powers and functions of the
abolished Oil Industry Commission under Republic Act No. 6173, as
amended, which are hereafter transferred to it under Section 12 of this
Decree.
c. Promulgate, subject to the approval of the
Secretary, such rules and regulations as may be necessary for the
efficient, effective and economical exercise of its powers and
discharge of its functions. chanroblesvirtualawlibrary
The decisions, orders, resolutions or actions of the Bureau may be
appealed to the Secretary whose decisions are final and executory
unless appealed to the President.
Section 8. Transferred Agency. — The Philippine
Atomic Energy Commission is transferred from the supervision and
control of the Office of the President and placed under the supervision
and control of the Department. chanroblesvirtualawlibrary
Section 9. Board of Energy. — There is hereby created
a Board of Energy, hereafter referred to in this Section as the Board,
which shall be under the supervision and control of the Office of the
President, and shall be composed of a Chairman and two (2) members to
be appointed by the President. It shall be assisted by such technical
and supportive staffs as it may appoint for the effective, efficient
and economical discharge of its powers and functions.
The Chairman and members of the Board shall be natural born citizens
and residents of the Philippines, of good moral character and at least
thirty-five (35) years old. The Chairman shall be a lawyer with
substantial experience in the practice of law. The members shall be of
recognized competence in the filed of economics, finance, banking,
commerce, industry, agriculture, engineering, management, law or labor.
No person who has worked within three (3) years immediately prior to
his appointment or is working in any private firm engaged in the
petroleum or electric industry or any other entity whose main business
is directly related to or connected with any such firm shall be
appointed to the Board.
The term of office of the Chairman and members shall be four (4) years,
but the first Chairman appointed shall hold office for four (4) years
and of the first two (2) members, one (1) shall hold office for a term
of three (3) years, and the other for a term of two (2) years. Unless
the President decides otherwise, no person shall be appointed to serve
more than two (2) successive terms in the Board.
The Chairman of the Board shall receive a compensation of fifty-four
thousand pesos annually, while the members shall each receive an annual
compensation of forty-eight thousand pesos, together with such
allowances as are presently enjoyed by the Chairman and members of the
abolished Oil Industry Commission.
The Board shall, after due notice and hearing, exercise the following
powers and functions, among others:cralaw:red
a. Regulate and fix the prices of petroleum products
and exercise such other powers and functions of the abolished Oil
Industry Commission under Republic Act No. 6173, as amended, which are
hereafter transferred to it under Section 12 of this Decree;chanroblesvirtualawlibrary
b. Regulate and fix the rate schedule or prices of
piped gas to be charged by duly franchised gas companies which
distribute gas by means of underground pipe system; chanroblesvirtualawlibrary
c. Regulate and fix the power rates to be charged by
electric companies except (1) electric cooperatives which shall
continue to be governed by Presidential Decree No. 269, as amended, and
(2) the National Power Corporation which shall continue to be governed
by Republic Act No. 6395, as amended;chanroblesvirtualawlibrary
d. Perform such other powers and functions as may be
necessary, including the licensing of refineries and regulation of
their capacities; reviewing the importation costs of crude oil and
providing appropriate remedies for unreasonable or out of line prices
and shipping costs thereof; and taking adequate measures to insure that
extraordinary gains arising from an increase in the prices of petroleum
products redound to the public interest, including payment by persons
or entities engaged in the petroleum business to the special Fund
created under Section 8(j) of Republic Act No. 6173, as amended:
Provided, That the purposes of such Special Fund are hereby broadened
to include its utilization for all energy projects; and
e. Issue Certificates of Public Convenience for the
operation of electric power utilities and services, except electric
cooperatives which shall continue to be governed by Presidential Decree
No. 269, as amended, including the establishment and regulation of
areas of operation of particular operators of public power utilities
and services, the fixing of standards and specifications in all cases
related to the issued Certificates of Public Convenience, and the
promulgation of rules requiring the operators concerned to install such
devices and adopt such procedures as would promote or insure the
highest degree of safety and convenience to persons and property.
The provisions of Sections 11 and 12, Republic Act No. 6173, as amended
by Presidential Decree No. 1128, shall govern proceedings before the
Board, the mode of review of its decisions or orders, including its
authority to grant provisional relief. chanroblesvirtualawlibrary
Section 10. Attached Agencies. — The following
government corporations are attached to the Department for purposes of
policy coordination and integration with sectoral programs: Philippines
National Oil Company, National Power Corporation and National
Electrification Administration. Such attachment shall be in accordance
with the applicable provisions of Article III, Chapter IV, Part II and
of Article III, Chapter I, Part XI of the integrated Reorganization
Plan.
The ownership by the National Development Company of shares in the
Manila Gas Corporation is hereby transferred to the Philippine National
Oil Company, subject to the payment to National Development Company of
the corresponding book value of its shareholdings in the said
corporation as of date of transfer to the Philippine National Oil
Company.
Unless the President directs otherwise the Secretary of the Department
shall be ex-officio Chairman of the governing boards of the Philippine
National Oil Company, National Power Corporation, and National
Electrification Administration. The Secretary of Public Works,
Transportation and Communications shall be the ex-officio member of the
governing boards of the National Electrification Administration and the
National Power Corporation in lieu of one appointive position in the
membership of said governing boards.
Section 11. Abolished Agencies. —
a. The Energy Development board is abolished and its
powers and functions are transferred to the Department except those
that are specifically transferred to the Bureau of Energy Development
under Section 12 of this Decree.
b. The Power Development Council is abolished and its
powers and functions are transferred to the Department.
c. The Philippine National Petroleum Center is
abolished and its functions are transferred to the appropriate units of
the Department. chanroblesvirtualawlibrary
d. The Oil Industry Commission is abolished and its
powers and functions are transferred to the Board of Energy and the
Department or the Bureau of Energy Utilization, as provided for in
Section 12 of this Decree.
e. The Board of Power and Waterworks is abolished and
its powers and functions relative to power utilities are transferred to
the Board of Energy, while its powers and functions relative to
waterworks are transferred to the National Water Resources Council.
All the foregoing transfers of powers and functions shall include
applicable funds and appropriations, records, equipment, property, and
such personnel as may be necessary; Provided, That with particular
reference to Paragraph e of this Section, only such amount of the funds
of the Specialized Regulatory Boards which pertain to the operation of
the Board of Power and Waterworks, as well as only the personnel of the
common Technical Staff of the Specialized Regulatory Boards completely
or primarily involved in power and waterworks shall be involved in such
transfers: Provided, further, That the applicable funds and
appropriations of the Oil Industry Commission shall all be transferred
to the Board of Energy.
Likewise, the foregoing transfers of powers and functions of the
abolished agencies shall to be the extent that they are not modified by
any specific provision of this Decree.
Section 12. Transferred Powers and Functions. — The
following powers and functions are transferred as hereafter indicated
to the extent that they are not modified by any specific provision of
this Decree:cralaw:red
a. With reference to Section 11(a) above, the powers
and functions transferred to the Bureau of Energy Development are:cralaw:red
i. The following powers and functions of the
abolished Energy Development Board under Presidential Decree No. 87:
Provided, That service contracts authorized under the said Decree,
including the transfer or assignment of interest in said service
contracts, shall require the approval of the Secretary:cralaw:red
(1) Define and give public notice when applicable of
the areas available for service contract;chanroblesvirtualawlibrary
(2) Enter into contracts herein authorized with such
terms and conditions as may be appropriate under the circumstances:
Provided, however, That no depletion allowance shall be granted:
Provided, further, That except as provided in Section 26 and 27 in
favor of Presidential Decree No. 87, no contract in favor of one
contractor and its affiliates shall cover less than fifty thousand
hectares nor more than seven hundred and fifty thousand hectares for
on-shore areas, or less than eighty thousand nor more than one million
five hundred thousand hectares for off-shore areas: And, Provided,
finally, That in no case shall the annual net revenue or share of the
government, including all taxes paid by or on behalf of the contractor,
be less than sixty percent of the difference between the gross income
and the sum of operating expenses and Filipino participation incentive;chanroblesvirtualawlibrary
(3) Provide for the manner and form of the income tax
payment, the reimbursement of operating expenses and the payment of
service fee in the service contract;chanroblesvirtualawlibrary
(4) Make specific proposals to the President for the
grant of subsidy to contractors and petroleum companies at least sixty
percent of the capital of which is owned by Philippine citizens, to be
derived from the revenue or share that will accrue to the government in
pursuance of Presidential Decree No. 87;chanroblesvirtualawlibrary
(5) Undertake intensive studies and researches on oil
field practices, procedures, and policies; and chanroblesvirtualawlibrary
(6) Promulgate such rules and regulations as may be
necessary and assess charges for services rendered, to implement the
intent and provisions of Presidential Decree No. 87.
ii. The following powers and functions of the
abolished Energy Development Board under Presidential Decree No. 910:
Provided, That service contracts authorized under the said Decree,
including the transfer or assignment of interest in said service
contracts, shall require the approval of the Secretary;chanroblesvirtualawlibrary
(l) Undertake by itself or through other
arrangements, such as service contracts, the active exploration,
exploitation, development, and extraction of energy resources in
selected areas and/or government reservations;chanroblesvirtualawlibrary
(2) Regulate all activities relative to the
exploration, exploitation, development, and extraction of fossil and
nuclear fuels and geothermal resources and, where necessary, prescribe
and collect fees in the exercise of such power;chanroblesvirtualawlibrary
(3) Exercise the other appropriate powers and
functions of the Petroleum Board under Presidential Decree No. 87 which
were transferred to the Energy Development Board by Presidential Decree
No. 910; and
(4) Exercise the powers and functions of the Bureau
of Mines and/or the Department of Natural Resources relative to the
exploration, development, and administration of coal bearing lands as
provided for in Presidential Decree No. 463 and Act No. 2719, including
the powers and functions of the Bureau of Mines and/or the Department
of Natural Resources under Republic Act No. 5093 and other laws
relating to the promotion and regulation of the exploration,
exploitation and development of geothermal energy, natural gas and
methane gas.
iii. The powers and functions of the abolished Energy
Development Board under Section 18 of Presidential Decree No. 972,
entitled "An Act to Promote an Accelerated Exploration, Development,
Exploitation, Production and Utilization of Coal", relative to the
implementation of the provisions of the said Decree and the
promulgation of rules and regulations to implement the same: Provided,
That coal operating contracts, including the transfer or assignment of
interest in said contracts, shall require the approval of the Secretary.
iv. The following powers and functions of the
abolished Energy Development Board under Section 3 of Presidential
Decree No. 1068:cralaw:red
(1) Formulate and direct the implementation of a
comprehensive national energy program, subject to periodic review and
revisions on non-conventional energy research, development and
utilization;chanroblesvirtualawlibrary
(2) Integrate, coordinate, direct and control all
research, development and utilization efforts, programs and projects in
non-conventional energy resources of all government agencies and
instrumentalities including government-owned and controlled
corporations;chanroblesvirtualawlibrary
(3) Review and approve all on-going or planned
research, development and utilization projects on non-conventional
energy resources whether basic or applied in nature, supported or
planned to be supported by government funds or funds obtainable
elsewhere through government intercession or assistance; chanroblesvirtualawlibrary
(4) Formulate criteria for determining priority for
proposed research, development and utilization projects on
non-conventional energy resources and accordingly identify and select
execution, financing and funding schemes;chanroblesvirtualawlibrary
(5) Designate project implementors, coordinate and
monitor the progress of all projects and activities, on-going or
planned projects, in the implementation of the comprehensive national
energy program;chanroblesvirtualawlibrary
(6) Provide necessary and appropriate supportive
efforts to the non-conventional energy research, development and
utilization program such as the launching of vigorous information and
promotion drive, assistance and entry of suitable foreign expertise in
order to accelerate the pace of local research, development and
utilization and the training of qualified Filipino personnel in the
various aspects of non-conventional energy, proliferation of those
applications in which technologies have proven viable, such as bio-gas
generation, windmills for water, pumping and power generation, from
agricultural and industrial wastes, establishment of demonstration
systems like solar water heaters, solarr-conditioning and energy
plantations;chanroblesvirtualawlibrary
(7) Develop and implement specific programs requiring
the participation not only of government agencies and instrumentalities
but also of the private sector;chanroblesvirtualawlibrary
(8) Grant incentives provided for in Presidential
Decree No. 1068 and recommend the grant of such other incentives as
shall be necessary and appropriate to enterprises, industries and
individuals who shall conduct their own or participate in research and
development or apply currently available non-conventional energy
technology to their industrial process or homes; and
(9) Promulgate such rules and regulations as may be
necessary to implement the objectives and provisions of Presidential
Decree No. 1068.
b. With reference to Section 11(d) above, the powers
and functions of the abolished Oil Industry Commission under Republic
Act No. 6173, as amended, shall be transferred as follows:cralaw:red
i. The following powers and functions are transferred
to the Department:cralaw:red
(1) Assure that the country shall have a proper,
adequate and continuous supply of crude oil and refined petroleum
products under the most economic and competitive terms possible
considering all available sources of supply;chanroblesvirtualawlibrary
(2) Study the importation of crude oil into the
Philippines and determine its most economical sources, transportation
routes, and freight rates; chanroblesvirtualawlibrary
(3) Look into all available sources of supply of
crude oil, draw up plans to cope with such contingencies as may arise
should prevailing sources of supply become closed or inaccessible, and
enter into such preliminary negotiations or arrangements with possible
alternative sources as may be necessary to assure a stable, adequate
and continuous supply of crude oil and refined petroleum products under
the most economic and competitive terms possible;chanroblesvirtualawlibrary
(4) Recommend to the President that the State, thru
such agency or agencies as the President may designate, acquire equity
in any refinery now existing or that may be organized hereafter:
Provided, however, That equity so acquired shall eventually be made
available to the public under such terms and conditions as shall be
consistent with government policy then in effect, giving priority to
dealers of petroleum products and gasoline station owners or operators;
and
(5) Recommend to the President that the State, thru
such agency as the President may designate, take over the operation of
any refinery or other firm, corporation or entity engaged in the
petroleum industry whenever the public welfare or national interest so
requires or (a) such refinery, firm, corporation or entity ceases or
threatens to cease or substantially reduce its operations, and (b) its
cessation or threatened cessation or reduction or threatened reduction
of operations threatens the continued supply of petroleum products at
reasonable prices to the general public or to industries dependent on
petroleum products for sources of energy or otherwise creates a clear
and present danger to the national welfare or national security:
Provided, however, That the operation by the State shall continue only
for such period of time as the threat or danger persists: Provided,
further, That just compensation shall be paid for the use of the
property: And, Provided, finally, That any unrecovered investment made
by the State during the take over shall reimbursed by the refinery,
firm, corporation or entity. chanroblesvirtualawlibrary
ii. The following powers and functions are
transferred to the Bureau of Energy Utilization: chanroblesvirtualawlibrary
(1) Assure that the petroleum industry, as a business
vital to the national interest, operates under conditions of orderly
and economic competition;chanroblesvirtualawlibrary
(2) Protect gasoline dealers and distributors from
unfair and onerous trade conditions;chanroblesvirtualawlibrary
(3) Minimize the cost of, and the outflow of foreign
exchange involved in, the operations of the industry;chanroblesvirtualawlibrary
(4) Induce and effect the increasing participation of
Filipino capital, labor and management in the industry and prevent
discrimination against any person by reason of race, color, creed or
political belief;chanroblesvirtualawlibrary
(5) Regulate investments of oil companies in order to
prevent monopoly, combinations in restraint of trade, unfair
competition and economic domination; chanroblesvirtualawlibrary
(6) Encourage and assist in the organization of
associations of Filipino oil and gasoline dealers and distributors
throughout the Philippines, public utility operators, gasoline and oil
consumers and other similar groups, through the formation of
cooperatives or through other group action;chanroblesvirtualawlibrary
(7) Regulate the operations and trade practices of
the industry in order to encourage orderly competition, prevent
monopolies and collusive practices within the industry, giving due
regard to the ecological and environmental needs of the country;chanroblesvirtualawlibrary
(8) Require that preference be given to Philippine
vessels and bottoms for the purpose of transporting crude oil to and
from the Philippines where said vessels can undertake said function on
substantially the same basis as foreign-owned vessels;chanroblesvirtualawlibrary
(9) Take adequate steps to prevent monopolies and
combinations in restraint of trade within the petroleum industry, or
involving enterprises engaged in the petroleum industry;chanroblesvirtualawlibrary
(10) Authorize or approve the importation by any
agency or instrumentality of the government or a government-owned or
controlled corporation of crude oil or petroleum product from any
available source, over and above the normal importations of such
entities, whenever it has determined that there is a shortage of any
petroleum product affecting public interest, and take such other steps
as it may deem necessary, including the temporary adjustment of the
levels of prices of petroleum products and the adoption of a mechanism
which will require the payment to the Special Fund created under
Section 8(j) of Republic Act No. 6173, as amended, by persons or
entities engaged in the petroleum industry, in such amounts as it may
determine, which will enable the importer to recover its cost of
importation; and chanroblesvirtualawlibrary
(11) Require all leadership agreement to be filed and
registered with the Bureau as public documents.
iii. The following powers and functions are
transferred to the Board of Energy:cralaw:red
(1) Assure the public of reasonable prices for
petroleum products considering the international price levels of crude
oil and petroleum products and after allowing for proper and reasonable
cost of importing, shipping, transporting, processing, refining,
storing, distributing, marketing and selling crude oil and petroleum
products in the Philippines, and for a fair and reasonable return; and
prevent collusive practices in the industry, particularly as to prices;chanroblesvirtualawlibrary
(2) Determine whether current prices of petroleum
products are reasonable and set the prices of the same, providing for a
fair and reasonable return. No changes in prices may thereafter be made
by the Board, without prior public notice and hearing at which any
consumer of petroleum products and other parties who may be affected
may appear and participate. In setting prices or making changes
thereof, the Board shall be guided by the following considerations:cralaw:red
(a) Whether claimed increases or decreases in costs,
sales or profits are real or simulated;chanroblesvirtualawlibrary
(b) Whether expenses and costs which are claimed to
have been incurred, or are being incurred, or are to be incurred are
reasonable, and whether any increase therein may be offset by increased
efficiency and reduction of excessive or unnecessary expenses;chanroblesvirtualawlibrary
(c) The impact of the proposed prices or change
therein on the economy and on the consuming public particularly low
income groups and industries essential to the national welfare or
security; and
(d) The cost and profit levels of the industry.
(3) Regulate the capacities of new refineries or
additional capacities of existing refineries so as to accomplish the
purposes and objectives of Republic Act No. 6173, as amended;chanroblesvirtualawlibrary
(4) License refineries that may be organized after
the enactment of this Decree, under such terms and conditions as are
consistent with the national interest;chanroblesvirtualawlibrary
(5) Review the cost at which crude oil had been
imported into the Philippines with the preceding year whether by
private entities or by the government, whenever the Board has received
a formal complaint or has reason to believe that prices of shipping
costs at which crude oil has been or is being imported into the
Philippines are unreasonable or out of line with trends in the
international market, taking into consideration among other factors,
the equity and security of supply, availability and location of crude
oil, and freight rates prevailing at the time; and, if found to be
unreasonable or out of line, require the importer or importers
concerned to reimburse the excess of the foreign exchange involved to
the Central Bank of the Philippines and fix maximum import cost,
requiring that, before future importation be made at a cost in excess
thereof, the approval of the Board be first secured. Any order of the
Board in the exercise of this power shall be binding on the Central
Bank of the Philippines, the Bureau of Customs and all other executive
agencies of the government;chanroblesvirtualawlibrary
(6) Take appropriate measures whenever an authorized
increase in the prices of petroleum products would result in an
extraordinary gain from existing inventories, including the payment by
persons or companies benefited to the Special Fund created under
Section 8(j) of Republic Act No. 6173, as amended, of such amounts as
the Board may determine in an appropriate order, as would assure that
said extraordinary gain will redound to the public interest; and
(7) Require through an appropriate order, payment by
persons or companies engaged in the business of importing,
manufacturing and/or marketing petroleum products, to the Special Fund
created under Section 8(j) of Republic Act 6173, as amended, of amounts
not exceeding fifteen centavos per liter of refined petroleum products.
In the exercise of this power, the Board shall take into account the
requirement of the Special Fund in relation to the purposes for which
it was created, the effect of the payment on prices of petroleum
products and, corollarily, its cost impact on the economy and/or the
consuming public and the cost and profit levels of the industry. chanroblesvirtualawlibrary
iv. Except as otherwise specifically provided, the
following powers and functions of the abolished Oil Industry Commission
under Republic Act No. 6173, as amended, are transferred either to the
Bureau of Energy Utilization or the Board of energy, or both, to the
extent applicable and appropriate in the light of the foregoing
transfers of powers and functions:cralaw:red
(1) Set conditions which would accomplish the
purposes of Republic Act No. 6173, as amended, under which persons,
natural or juridical, can engage or continue engaging in the business
of importing, exporting, re-exporting, shipping, transporting,
processing, refining, storing, distributing, marketing or selling crude
oil, gasoline, kerosene, gas, and other refined petroleum products or
by-products;chanroblesvirtualawlibrary
(2) Require importers of crude oil and petroleum
products to file data on their import and shipping costs as well as
other material information relative thereto;chanroblesvirtualawlibrary
(3) Require all persons, corporations and other
entities engaged in the petroleum industry and their associations or
institutes; to furnish it with such relevant information as it may need
in the discharge of its duties; chanroblesvirtualawlibrary
(4) Require all leadership agreements to be filed and
registered as public documents;chanroblesvirtualawlibrary
(5) Issue subpoena and subpoena duces tecum in any
inquiry, study, hearing, investigation, or proceedings which it may
decide to undertake in the exercise of its powers and functions; chanroblesvirtualawlibrary
(6) Promulgate rules and regulations relevant to
procedures governing hearings before it and enforce compliance with any
rule, regulations, order, or other requirement: Provided, That said
rules and regulations shall take effect fifteen days after publication
in the Official Gazette;chanroblesvirtualawlibrary
(7) Perform such other acts as may be necessary or
conducive to the exercise of its powers and functions; and
(8) Undertake a continuing study of the petroleum
industry in its domestic and international aspects, gather and collate
information and statistics bearing on the industry, submit an annual
report to the President of the Philippines on its activities and the
results of its studies, including therein such matters as it may deem
appropriate subjects of legislation or executive action, and keep
itself regularly and thoroughly informed of conditions in the industry
in order to enable it to perform its functions, exercise its powers and
discharge its duties effectively.
The annual report shall include, among others, the following data on a
company-by-company basis:cralaw:red
(a) Volume, weight, type, import price, and supplier
of crude oil and petroleum products imported;chanroblesvirtualawlibrary
(b) Tonnage, type, nationality and ownership of
vessels used in importing crude oil and petroleum products, as well as
shipping costs;chanroblesvirtualawlibrary
(c) Audited financial statements of petroleum
refineries and marketing companies;chanroblesvirtualawlibrary
(d) Data on exported products, price of same, country
of destination, and vessel used;chanroblesvirtualawlibrary
(e) Listed wholesale price of gasoline on a monthly
basis;chanroblesvirtualawlibrary
(f) Posted and market prices of crude oil at sources
of importation and other known sources of crude oil supply; and
(g) Cost of refining petroleum products.
v. the provisions of Section 16 of Republic Act No.
6173, as amended, shall continue to be effective.
c. The powers and functions of the Philippine
National Oil Company relating to the regulation of other oil companies,
including the importation of refined petroleum products, are hereby
transferred to the Department or its bureaus as appropriate. chanroblesvirtualawlibrary
Section 13. Concurrent Authority Over the Regulation
of the Mining of Radioactive Minerals. — The powers and functions of
the Bureau of Mines relative to the mining location, registration,
exploration, development and exploitation of radioactive minerals
containing uranium, thorium and other radioactive elements under
Presidential Decree No. 1101, shall be subject to the concurrent
clearance of the Bureau of Energy Development which may prescribe such
additional terms and conditions as are necessary insofar as these
pertain to energy development. chanroblesvirtualawlibrary
Section 14. Representation in the National Water
Resources Council. — The Department shall be represented in the
National Water Resources Council by the Secretary of Energy or his
designated representative as an additional member thereof.
Section 15. Representation in the NEDA. — The
Secretary of Energy shall be an additional member of the NEDA Board.
Section 16. Representation in the National Science
Development Board. — The Secretary of Energy and the Secretary of
Industry shall be additional members of the National Science
Development Board.
Section 17. Representation in the National
Electrification Administration. — The Secretary of Energy shall be an
additional member of the Board of National Electrification
Administration.
Section 18. Representation in the Maritime Industry
Authority. — The Secretary of Energy shall be an additional member of
the Board of the Maritime Industry Authority.
Section 19. Benefits of Personnel Who May Be Laid Off— Personnel of agencies abolished or otherwise affected by this
reorganization who are laid off as a result of the implementation of
this Decree shall be entitled to benefits and privileges provided for
under Sections 5 and 6 of Republic Act No. 5435, as amended.
Section 20. Appropriation. — To carry out the
purposes of this Decree, there is hereby appropriated out of any funds
in the National Treasury not otherwise appropriated, the sum of ten
million pesos (P10,000,000.00) for the operation of the Department and
its bureaus, including such amount thereof as may be needed to augment
the appropriations of the Board of Energy, for the remaining period of
FY 1977 in addition to whatever applicable appropriation that may be
transferred to it from among the government agencies reorganized under
this Decree. Thereafter, the appropriation for the Department, its
bureaus and the Board of Energy shall be included in the Annual General
Appropriation Act. chanroblesvirtualawlibrary
Section 21. Applicability Clause. — The applicable
provisions of Republic Act No. 6173, as amended, otherwise known as the
"Oil Industry Commission Act"; Presidential Decree No. 269, otherwise
known as the "National Electrification Administration Decree";
Presidential Decree No. 87, also known as the "Oil Exploration and
Development Act of 1972"; Presidential Decree No. 910, creating the
Energy Development Board; Presidential Decree No. 948, strengthening
and reconstituting the Power Development Council; Presidential Decree
No. 972, otherwise known as the "Coal Development Act of 1976";
Presidential Decree No. 1068, directing the acceleration of research,
development and utilization of non-conventional energy resources;
Presidential Decree No. 1101, declaring areas containing radioactive
minerals open to mining location and disposition and such other laws
and decrees governing the administration and development of energy
resources shall continue to have full force and effect, except insofar
as inconsistent with this Decree. chanroblesvirtualawlibrary
Section 22. Separability Clause. — Should any
provision of this Decree be held unconstitutional, no other provisions
hereof shall be affected thereby.
Section 23. Repealing Clause. — All laws, decrees,
executive orders, administrative orders, rules and regulations
inconsistent herewith are hereby repealed, amended or modified
accordingly. chanroblesvirtualawlibrary
Section 24. Effectivity. — This Decree shall take
effect immediately.
Done in the City of Manila,
this 6th day of October, in the year of Our Lord, nineteen hundred and
seventy-seven.
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