sochate TWENTIETH CONGRESS OF THE) 26 MAR 19 P2:26 REPUBLIC OF THE PHILIPPINES First Regular Session SENATE S.B. No. 2007 RECEIVED BY: Introduced by SENATOR IMEE R. MARCOS AN ACT REQUIRING THE MANDATORY UNBUNDLING AND DISCLOSURE OF PETROLEUM PRICES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 8479, OTHERWISE KNOWN AS THE "DOWNSTREAM OIL INDUSTRY DEREGULATION ACT OF 1998," AND FOR OTHER PURPOSES EXPLANATORY NOTE Republic Act No. 8479, otherwise known as the "Downstream Oil Industry Deregulation Act of 1998," was enacted to liberalize the downstream oil industry in order to promote competition, ensure a steady and sufficient supply of petroleum products, and encourage fair and efficient pricing. Notwithstanding these objectives, the current deregulated framework has not sufficiently addressed the persistent lack of transparency in petroleum pricing. At present, pump prices are presented as a single aggregated amount, without a clear and accessible breakdown of their underlying components, including international crude costs, refining expenses, distribution and marketing costs, taxes, and profit margins. This opacity limits the ability of consumers to understand price movements and weakens public accountability in the industry. Recent geopolitical developments have further exposed these structural gaps. The ongoing conflict involving Iran has disrupted global energy markets, highlighting the vulnerability of petroleum-importing countries such as Philippines. The instability has significantly affected global oil supply, particularly with disruptions in the Strait of Hormuz, a critical passage through which a substantial portion of the world's oil supply transits. As a result, global oil prices have experienced sharp volatility, with • prices exceeding USD 100 per barrel during periods of heightened tension. These developments underscore a fundamental limitation of the existing legal framework. While deregulation promotes market efficiency, it does not adequately address information asymmetry in petroleum pricing. In periods of extreme volatility, the absence of mandatory price unbundling prevents both regulators and consumers from determining whether domestic price adjustments accurately reflect global cost movements or include unwarranted margins.
In light of the foregoing, this measure seeks to mandate the unbundling and disclosure of petroleum prices. By requiring a clear and standardized breakdown of price components, the bill aims to enhance transparency, empower consumers to make informed decisions, and strengthen regulatory oversight. Furthermore, the proposed measure establishes a rules-based pricing reference system under the Department of Energy. This system will provide indicative price bands anchored on objective factors, such as international benchmark prices and prevailing exchange rates. While preserving the market-based nature of pricing under a deregulated regime, the mechanism promotes accountability and discourages unjustified price deviations. In view of the foregoing, the passage of this measure is earnestly sought. Free h. Mares AMEE R. MARCOS
Studie Difice of thir scoretarp • TWENTIETH CONGRESS OF THE) REPUBLIC OF THE PHILIPPINES First Regular Session 26 MAR 19 P2:27 SENATE S.B. No. 2007 RECEIVED BY: Introduced by SENATOR IMEE R. MARCOS AN ACT REQUIRING THE MANDATORY UNBUNDLING AND DISCLOSURE OF PETROLEUM PRICES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 8479, OTHERWISE KNOWN AS THE "DOWNSTREAM OIL INDUSTRY DEREGULATION ACT OF 1998," AND FOR OTHER PURPOSES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
Section 1. Short Title. - This Act shall be known as the "Downstream Oil
Industry Transparency and Fair Pricing Act."
Sec. 2. A new Section 15 is hereby inserted in Republic Act No. 8479, or the
"Downstream Oil Industry Deregulation Act of 1998", to read as follows: "SEC. 15. MANDATORY UNBUNDLING AND DISCLOSURE OF PETROLEUM PRICES. - ALL OIL COMPANIES, REFINERS, IMPORTERS, DISTRIBUTORS, AND RETAILERS SHALL BE REQUIRED TO UNBUNDLE AND DISCLOSE THE COMPONENTS OF PETROLEUM PRODUCT PRICES. THE UNBUNDLED PRICE SHALL INCLUDE, BUT NOT LIMITED TO, THE FOLLOWING COMPONENTS: (A) COST OF CRUDE OIL OR FINISHED PETROLEUM PRODUCTS; (B) FREIGHT AND INSURANCE COSTS; (C) REFINING AND PROCESSING COSTS; (D) DISTRIBUTION AND MARKETING COSTS; (E) TAXES, INCLUDING EXCISE TAX AND VALUE-ADDED TAX; (F) DEALER MARGINS; AND (G) OTHER RELEVANT CHARGES OR ADJUSTMENTS. THE UNBUNDLED BREAKDOWN SHALL BE:
(A) DISPLAYED IN A CLEAR AND CONSPICUOUS MANNER AT ALL RETAIL OUTLETS; (B) PUBLISHED ON THE OFFICIAL WEBSITES AND DIGITAL PLATFORMS OF OIL COMPANIES; AND (C) SUBMITTED REGULARLY TO THE DEPARTMENT OF ENERGY (DOE) FOR MONITORING AND PUBLICATION. THE DOE SHALL PRESCRIBE THE STANDARD FORMAT AND FREQUENCY OF DISCLOSURE TO ENSURE UNIFORMITY AND COMPARABILITY ACROSS INDUSTRY PARTICIPANTS."
Sec. 3. A new Section 16 is hereby inserted in Republic Act No. 8479, or the
"Downstream Oil Industry Deregulation Act of 1998", to read as follows: "SEC. 16. PUBLIC NOTICE, CONSULTATION, AND HEARING REQUIREMENT. - ANY ADJUSTMENT IN PUMP PRICES ATTRIBUTABLE TO COMPLIANCE WITH THE UNBUNDLING REQUIREMENTS UNDER THIS ACT SHALL NOT BE IMPLEMENTED WITHOUT PRIOR PUBLIC NOTICE AND CONSULTATION. OIL COMPANIES SHALL: (A) PROVIDE AT LEAST SEVEN (7) DAYS' PRIOR NOTICE TO THE DOE AND THE PUBLIC; (B) CLEARLY EXPLAIN THE BASIS OF ANY ADDITIONAL COSTS OR ADJUSTMENTS; AND (C) ISSUE A PUBLIC ADVISORY OR WARNING INDICATING THE EXPECTED IMPACT ON PUMP PRICES."
Sec. 4. A new Section 17 is hereby inserted in Republic Act No. 8479, or the
"Downstream Oil Industry Deregulation Act of 1998", to read as follows: "SEC. 17. ESTABLISHMENT OF A RULES-BASED PRICING REFERENCE SYSTEM, - A RULES-BASED PETROLEUM PRICING REFERENCE SYSTEM IS HEREBY ESTABLISHED. THE DOE SHALL PUBLISH A WEEKLY INDICATIVE PRICE BAND BASED ON: (A) INTERNATIONAL BENCHMARK PRICES OF CRUDE OIL AND REFINED PETROLEUM PRODUCTS; (B) FOREIGN EXCHANGE RATES; (C) APPLICABLE TAXES AND DUTIES; (D) REASONABLE INDUSTRY COST ASSUMPTIONS FOR FREIGHT, DISTRIBUTION, AND MARKETING; AND (E) OTHER RELEVANT ECONOMIC INDICATORS AS MAY BE DETERMINED BY THE DOE.
THE INDICATIVE PRICE BANDS SHALL NEITHER CONSTITUTE PRICE CONTROLS NOR IMPAIR THE MARKET-BASED PRICING SYSTEM UNDER REPUBLIC ACT NO. 8479. OIL COMPANIES SHALL RETAIN THE DISCRETION TO SET PRICES SUBJECT TO MARKET CONDITIONS. ANY DEVIATION OF RETAIL PUMP PRICES SIGNIFICANTLY OUTSIDE THE ESTABLISHED INDICATIVE PRICE BANDS SHALL REQUIRE: (A) SUBMISSION OF A WRITTEN JUSTIFICATION TO THE DOE; (B) PUBLIC DISCLOSURE OF THE BASIS FOR SUCH DEVIATION; AND (C) POSSIBLE REVIEW OR INQUIRY BY THE DOE TO DETERMINE REASONABLENESS. THE DOE SHALL REGULARLY PUBLISH THE INDICATIVE PRICE BANDS AND SUPPORTING DATA IN A FORMAT ACCESSIBLE TO THE PUBLIC."
Sec. 5. Regulatory Oversight. - The DOE is hereby authorized to:
(a) Audit cost structures submitted by oil companies; (b) Require submission of supporting documents; (c) Set and review reasonable margin benchmarks; (d) Publish regular market monitoring reports; and (e) Recommend enforcement action to the appropriate agencies.
Sec. 6. Prohibited Acts. - It shall be unlawful for any covered entity to:
(a) Fail to disclose or misrepresent any component of the unbundled price; (b) Implement unjustified or excessive charges under the guise of compliance with this Act; (c) Refuse to comply with the notice and consultation requirements
Sec. 7. Penalties. - Any violation of this Act shall be subject to administrative
fines, suspension or revocation of licenses, and other penalties as may be determined by the DOE, without prejudice to the filing of appropriate civil or criminal actions.
Sec. 8. Implementing Rules and Regulations. - The DOE, in coordination with
other relevant agencies, shall formulate and issue the necessary implementing rules and regulations within ninety (90) days after the effectivity of this Act.
Sec. 9. All succeeding sections of Republic Act No. 8479, or the "Downstream
Oil Industry Deregulation Act of 1998", shall be renumbered accordingly.
Sec. 10. Separability Clause. - If any provision or part hereof is declared
unconstitutional, the other provisions not affected thereby shall remain in full force and effect.
Sec. 11. Repealing Clause. - All laws, decrees, orders, rules and regulations
or parts thereof inconsistent with this Act are hereby repealed or modified accordingly.
Sec. 12. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved,