REPUBLIC ACT NO. 6173 - AN
ACT DECLARING A NATIONAL POLICY ON THE PETROLEUM INDUSTRY, REGULATING
THE ACTIVITIES AND RELATIONS OF PERSONS AND ENTITIES ENGAGED THEREIN,
ESTABLISHING AN OIL INDUSTRY COMMISSION TO EFFECTUATE THE SAME, AND
DEFINING ITS FUNCTIONS, POWERS AND OBJECTIVES, AND FOR OTHER PURPOSES
Section 1. Title.
— This Act shall be known as the Oil Industry Commission Act.
Sec. 2. Declaration of Policy and Purposes. —
Petroleum and its products being vital to national security, and their
continued supply at reasonable prices being essential to the general
welfare, it is hereby declared to be the policy of the State that the
act and business of importing, exporting, re-exporting, shipping,
transporting, processing, refining, storing, distributing, marketing,
and selling crude oil, gasoline, kerosene, gas and other refined
petroleum products as well as the operations and activities of natural
and juridical persons, firms and entities engaged in the petroleum
industry shall be carried out in a manner consistent with the public
interest, so as to attain the following objectives and purposes:
(a) To 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;
(b) To assure that the petroleum industry, as a
business vital to the national interest, operates under conditions of
orderly and economic competition;
(c) To 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
to prevent collusive practices in the industry, particularly as to
prices;
(d) To protect gasoline dealers and distributors from
unfair and onerous trade conditions;
(e) To minimize the cost of, and the outflow of
foreign exchange involved in, the operations of the industry;
(f) To induce and effect the increasing participation
of Filipino capital, labor and management in the industry and to
prevent discrimination against any person by reason of race, color,
creed or political belief; and
(g) To regulate investments of oil companies, in
order to prevent monopoly, combinations in restraint of trade, unfair
competition and economic domination.
However, this Act shall not apply to oil exploration or to industries
not connected with petroleum importation, refining or distribution.
Sec. 3. Oil Industry Commission. — To implement
the national policy and attain the objectives and purposes of this Act,
an independent Commission is hereby created, which shall be known as
the Oil Industry Commission, and shall be organized within sixty days
after the approval of this Act. The Commission shall be composed of a
Chairman and four Associate Commissioners. The Chairman and the
Associate Commissioners shall be natural-born citizens and residents of
the Philippines.n addition, the Chairman shall possess all the
qualifications of a Justice of the Supreme Court and the Associate
Commissioners shall be at least thirty-five years old, of good moral
character and of recognized competence in the field of economics,
finance, banking, commerce, industry, agriculture, engineering,
management, law or labor. They shall be appointed by the President of
the Philippines, with the consent of the Commission on Appointments. No
person who has worked within three years immediately prior to his
appointment or is working in any firm engaged in the petroleum industry
or any other entity whose main business is directly related to any such
firm shall be appointed to the Commission.
The term of office of the Chairman and the Associate Commissioners
shall be four years, but the first Chairman appointed shall hold office
for four years and of the first four Commissioners two shall hold
office for a term of two years, and two for a term of three years. No
person may be appointed to serve more than two successive terms.
The Chairman and Associate Commissioners shall, upon assumption of
office and within the month of January of every other year thereafter,
as well as upon the expiration of their respective terms of office, or
upon their resignation or separation from office, prepare and file with
the offices of the President, the President of the Senate and the
Speaker of the House of Representatives a true, accurate, complete,
detailed and sworn statement of assets and liabilities, including a
statement of amounts and sources of income, amounts of personal and
family expenses, and amounts of income taxes paid for the next
preceding calendar year: provided, that the first statement may be
filed within the month of January next following if the Chairman or
Associate Commissioner concerned assumes office less than two months
before the end of the calendar year.
Three members of the Commission shall constitute a quorum and the vote
of three members shall be necessary for the adoption of any rule,
ruling, order, resolution, decision or other act of the Commission. The
Commission shall hold office in the City of Manila, or at such other
places as the President of the Philippines may designate.
Sec. 4. Compensation of Commissioners. — The
Chairman of the Oil Industry Commission shall receive a compensation of
Fifty thousand pesos annually and a monthly commutable allowance of one
thousand pesos while the Associate Commissioners shall each receive an
annual compensation of Forty thousand pesos and a monthly commutable
allowance of six hundred pesos. The Chairman and Associate
Commissioners shall devote their full time to the Commission and shall
not accept other employment.
Sec. 5. Staff . — The Commission shall appoint and
maintain an adequate staff, which shall include a Secretary of the
Commission. The Secretary shall be a member of the Philippine Bar with
at least five years experience in the active practice of law in the
Philippines or in the discharge of an office requiring as an
indispensable requisite admission to the practice of law in the
Philippines. The members of the technical staff, except for those
performing purely clerical functions, shall possess at least a
bachelor's degree in the line specialization required by their
respective positions: provided, that except as to positions which are
policy-determining, highly technical or primarily confidential, all
positions in the Commission are subject to the provisions of the Civil
Service Law and Rules, but are exempt from the regulations of the Wage
and Position Classification Office.
Sec. 6. Functions of the Commission. — The
Commission shall have supervision and jurisdiction over all persons,
corporations, firms or entities engaged in the business of importing,
exporting, re-exporting, shipping, transporting, processing or refining
of indigenous and imported crude oil or other petroleum products,
storing, marketing, distributing, or selling, both at wholesale and
retail, gasoline, gas, oil, kerosene, and other crude or refined
petroleum products, and shall regulate and supervise the operations and
activities of said persons and entities including the following:
(a) To set conditions which would accomplish the
purposes of this Act, 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;
(b) To study the importation of crude oil into the
Philippines and to determine its most economical sources transportation
routes, and freight rates;
(c) To 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;
(d) To 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;
(e) To 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 be made available to
the public giving priority to dealers of petroleum products and
gasoline station owners or operators; and
(f) To do and perform any and all such acts as may be
necessary and proper to carry out the purpose of this Act.
The jurisdiction of, and all functions exercised by, the Bureau of
Mines over petroleum refineries are hereby transferred to the
Commission.
Sec. 7. Powers of the Commission Upon Notice and
Hearing. — The Commission shall have power, upon proper notice and
hearing, in accordance with the provisions of this Act:
(a) To determine whether current market prices of
petroleum products are reasonable and to set the prices of the same,
providing for a fair and reasonable return. No changes in prices may
thereafter be made by the Commission without prior public notice and
hearing at which any consumer of petroleum products and other parties
who may be affected may appear and participate.n setting prices or
making changes, thereof, the Commission shall be guided by the
following considerations:
(1) Whether claimed increases or decreases in costs,
sales or profits are real or simulated;
(2) 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 increases therein may be offset by
increased efficiency and reduction of excessive or unnecessary
expenses;
(3) 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
(4) The cost and profit levels of the industry.
(b) To regulate the capacities of new refineries or
additional capacities of existing refineries so as to accomplish the
purposes and objectives of this Act;
(c) The license refineries that may be organized
after the passage of this Act, under such terms and conditions as are
consistent with the national interest;
(d) To 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;
(e) To review the cost at which crude oil had been
imported into the Philippines within the preceding year, whether by
private entities or by the Government, whenever the Commission has
received a formal complaint or has reason to believe that prices or
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 quality 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, to require the importer or importers
concerned to reimburse the excess of the foreign exchange involved to
the Central Bank and to fix the maximum import cost, requiring that,
before future importations be made at a cost in excess thereof, the
approval of the Commission be first secured. Any order of the
Commission in the exercise of this power shall be binding on the
Central Bank, the Bureau of Customs and all other executive agencies of
the government;
(f) To 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;
(g) To take adequate steps to prevent monopolies and
combinations in restraint of trade within the petroleum industry, or
involving enterprises engaged in the petroleum industry;
(h) To recommend to the President that the State,
through 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 (1) such refinery, firm, corporation or entity
ceases or threatens to cease or substantially reduces or threatens to
reduce substantially its operations; and (2) 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 be reimbursed by the refinery, firm,
corporation or entity; and
(i) Whenever the Commission has received a formal
complaint and has determined that the price of any petroleum product is
unreasonable or out of line, or that there is a shortage of said
product, it may, in addition to fixing prices as above provided, permit
government agencies or private parties not engaged in refining
petroleum products to import the same, until such times as prices shall
have gone down to a reasonable level or the shortage has been relieved.
Sec. 8. Powers of the Commission Without Hearing.
— The Commission shall have the power to do the following without
hearing:
(a) Require importers of crude oil and petroleum
products to file with the Commission data on their import and shipping
costs as well as other material information relative thereto;
(b) 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
to discharge its duties under this Act, and to exercise its functions
and powers under Section s six; seven and nine hereof;
(c) Require all dealership agreements to be filed and
registered with the Commission as public documents;
(d) 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 functions, powers and duties
under this Act;
(e) Promulgate rules and regulations relevant to
procedures governing hearings before the Commission and enforce
compliance with any rule, regulation, order, or other requirement of
this Act or of the Commission: provided, that said rules and
regulations shall take effect fifteen days after publication in the
Official Gazette; and
(f) Perform such other acts as may be necessary or
conducive to the exercise of its functions and powers and the discharge
of its duties under this Act.
Sec. 9. Other Duties of the Commission. — The
Commission shall 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 members of Congress and 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. The Commission shall likewise 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 of the Commission shall include, among others, the
following data on a company by company basis:
(a) Volume, weight, type, import price, and supplier
of crude oil and petroleum products imported;
(b) Tonnage, type, nationality and ownership of
vessels used in importing crude oil and petroleum products, as well as
shipping costs;
(c) Audited financial statements of petroleum
refineries and marketing companies;
(d) Data on exported products, price of same, country
of destination, and vessel used;
(e) Listed wholesale price of gasoline on a monthly
basis;
(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.
SECTION 10. Commission Procedure. — All inquiries,
studies, hearings, investigations and proceedings conducted by the
Commission shall be governed by rules adopted by the Commission, and in
the conduct thereof the Commission shall not be found by the technical
rules of evidence: provided, that the Commission may summarily punish
for contempt by a fine not exceeding five hundred pesos or by
imprisonment not exceeding thirty days or both, any person guilty of
such misconduct in the presence of the Commission or so near thereto as
to seriously interrupt any hearing or session or any proceedings before
it, including cases in which a person willfully fails or refuses,
without just cause, to comply with a summons, subpoena or subpoena
duces tecum legally issued by the Commission or, being present at a
hearing, session or investigation, refuses to be sworn as a witness or
to answer questions when lawfully required to do so, or to furnish
information required by the Commission under this Act. The sheriff and
other police agencies of the place where the hearing or investigation
is conducted shall, upon the request of the Commission, assist it to
enforce the provision of this Section .
SECTION 11. Review of Commission's Order. — A party
adversely affected by any order of the Commission in the exercise of
its powers subject to hearing may, within a period of thirty days from
receipt of said order or fifteen days following denial of a motion for
reconsideration filed within the period to appeal, petition the Supreme
Court, by certiorari as a mode of appeal, to review and reverse, modify
or amend the same, without prejudice to invoking other special civil
remedies allowed under the Rules of Court. The order, ruling or
decision shall become executory fifteen days after the expiration of
the period to appeal. Unless the Supreme Court directs otherwise,
appeal shall not stay the execution of the ruling, order or decision.
The Supreme Court shall prescribe the procedure to be followed for such
appeals, but until it provides otherwise the procedure governing
appeals from the Public Service Commission shall be followed.
SECTION 12. Petroleum Dealers' or Distributors'
Association. — For the purpose of this Act, a petroleum dealers' or
distributors' association is an organization or association of
petroleum dealers or distributors dealing in petroleum products duly
registered with the Securities and Exchange Commission.
SECTION 13. Requirements to Petroleum Dealers' and
Distributors' Association. — Every petroleum dealers' or distributors'
association duly registered with the Securities and Exchange
Commission, shall keep books and records containing a list of its
members in alphabetical order and the minutes of its meetings, a list
of its officers, and in general shall comply with all the rules and
regulations of the Securities and Exchange Commission.
SECTION 14. Appropriations. — The sum of one million
five hundred thousand pesos or so much thereof as may be necessary for
the proper implementation of this Act for the fiscal years nineteen
hundred seventy-one and nineteen hundred seventy-two is hereby
appropriated out of any funds in the National Treasury not otherwise
appropriated. Thereafter, the operational expenses of the Commission
shall be drawn from fees and charges collected under the authority of
Section fifteen of this Act. Any unobligated balances at the end of
each fiscal year, starting with fiscal year nineteen hundred
seventy-three, shall accrue to the general funds.
SECTION 15. Additional Fee on Importations and Turn
Over of Collections; Release to the Commission is Ministerial. —
Effective July one, nineteen hundred seventy-one, there shall be
levied, assessed and collected, an additional fee of one-tenth of one
per cent of the CIF value of crude oil and petroleum products imported
into the Philippines. The fee imposed herein shall be collected at the
same time, in the same manner and subject to the same penalties as the
duties and taxes regularly imposed on such products. This fee shall not
be a basis for any increase in the price of any petroleum product as of
the date of the approval of this Act.
The Commissioner of Customs shall turn over the collections to the
Treasurer of the Philippines monthly within the first ten days of the
succeeding month. No portion of the collections may be transferred or
diverted to the general or any other fund or used or expended for any
purpose other than for the budgetary requirements of the Oil Industry
Commission, the provisions of any law to the contrary notwithstanding.t
shall be the ministerial duty of the Commissioner of the Budget and the
Treasurer of the Philippines, as well as the officers and employees
under their supervision and control, to effect releases of said
collections to the Commission upon order or authorization of the
Chairman thereof.
SECTION 16. Penalties. — (a) Any person who give
false or misleading data or information or willfully or through gross
negligence, conceals or falsifies a material fact, in any
investigation, inquiry, study or other proceedings held pursuant to
this Act, shall be punished with imprisonment of not less than two nor
more than six months, and with a fine of not less than five hundred nor
more than one thousand pesos: provided, however, that if the false or
misleading data or information shall have been given under oath, the
maximum penalty for giving false testimony or perjury shall be imposed;
(b) Any person who violates any provision of this Act
or any order, decision, ruling, or regulation of the Commission shall,
upon conviction, be sentenced for a period of not less than six months
and not more than five years and a fine of not less than five thousand
pesos and not more than twenty-five thousand pesos.f the offender be a
corporation, partnership or juridical person, the penalty shall be
imposed on the officer or officers responsible for permitting or
causing a violation by the corporation, partnership or juridical person
of the provisions of this Act;
(c) If the offender be a government official or
employee, the maximum penalty prescribed in paragraph (b) shall be
imposed and the offender shall suffer the additional penalty of
perpetual disqualification from public office without prejudice to any
administrative action against him;
(d) If the offender be a member of the Oil Industry
Commission, and the commission of the offense is attended by clear
abuse of discretion on his part, or by any corrupt practice defined in
Republic Act Numbered Three thousand nineteen, otherwise known as the
Anti-Graft and Corrupt Practices Act, or other similar irregularity,
the penalty imposed shall be a fine of fifty thousand pesos and
imprisonment of not less than ten years. A like penalty shall be
imposed upon any private person, whether in the government service or
not, who induces, aids or abets the offender in the commission of the
offense;
(e) It shall be an offense, penalized as provided in
paragraph (c) or (d) above, whichever may be applicable, for any person
serving in the Oil Industry Commission either as a Commissioner or as
staff member to directly or indirectly be employed by, or to receive
any compensation from, or to have any direct or indirect financial
interest in, any firm engaged in importing, refining or marketing crude
oil or any petroleum product;
(f) Any alien violating this Act shall, in addition
to the penalty herein provided, be deported after service of sentence
and shall not be permitted reentry into the Philippines.
SECTION 17. Separability of Any Provision. — If any
provision of this Act shall be held invalid, the remainder of this Act
shall not be affected thereby.
SECTION 18. Repealing Clause. — The provisions of
Republic Act Numbered Sixty-one hundred and twenty-four, otherwise
known as the Price Control Law, referring to petroleum products, and
all Acts or parts of Acts inconsistent with this Act are hereby
repealed but the repeal shall not affect judicial actions, prosecutions
or proceedings begun while the same were in force.
SECTION 19. Effective Date. — This Act shall take
effect upon its approval.
Approved: April 30, 1971
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