RA 8180 CHAPTER II TRANSITION PHASE (Section 11–14) — Full Text

Phases of Deregulation.

Section 11

SEC. 11. Phases of Deregulation. – In order to provide a smooth implementation of deregulation, the policy shift shall be done in two phases: Phase I (Transition Phase) and Phase II (Full Deregulation Phase).

OPSF Claims/Buffer Fund.

Section 12

SEC. 12. OPSF Claims/Buffer Fund. – Upon the effectivity of this Act and prior to Phase I, the Secretary of DOE shall seek the condonation of all outstanding claims against the OPSF: Provided, however, That it shall keep or provide a buffer fund of One billion pesos (P1,000,000,000) therein.

OPSF Coverage.

Section 13

SEC. 13. OPSF Coverage. – Paragraph (c) Section 8 of Presidential Decree No. 1936, as amended by Executive Order No. 137, is hereby further amended to read as follows: "c) Any additional amount to be imposed on petroleum products to augment the resources of the Fund through an appropriate Order that may be issued by the Board requiring payment by persons or companies engaged in the business of importing, manufacturing and/or marketing of petroleum products, including persons or companies that will directly import refined petroleum products for their own use."

Automatic Oil Pricing Mechanism.

Section 14

SEC. 14. Automatic Oil Pricing Mechanism. – To enable the domestic price of petroleum products to approximate and promptly reflect the price 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: To set the wholesale posted price of petroleum products during the transaction 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 three (3) months after the effectivity of this Act, approve a formula to determine the wholesale posted prices (WPP) of petroleum products based on the Singapore posting of refined petroleum products. Thereafter, the Board shall at the proper times automatically adjust the WPP of petroleum products based on the Singapore posting using 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) newspapers of general circulation." Paragraph 1 of Letter of Instruction No. 1441, to read as follows: "1. To review and reset 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." 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 wholesale posted prices of each petroleum product. Any price increase by beyond Fifty centavos (P0.50) per liter shall be charged against the OPSF. For this purpose, the OPSF accrued balance shall be initially fixed at One billion pesos (P1,000,000,000)." 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 the rates charged by water transport operators, haulers and pipeline concessionaires. Depending on the basis of the automatic pricing mechanism, the Board may, within three (3) months after the effectivity of this Act and after proper notice and full public hearing, prescribe a formula which will automatically set the margins of the refiners, 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 IIIFULL DEREGULATION PHASE