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:
With reference to Section 11(a) above, the powers and functions transferred to the Bureau of Energy Development are:
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:
Define and give public notice when applicable of the areas available for service contract;
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;
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;
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;
Undertake intensive studies and researches on oil field practices, procedures, and policies; and
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.
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;
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;
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;
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
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.
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.
The following powers and functions of the abolished Energy Development Board under Section 3 of Presidential Decree No. 1068:
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;
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;
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;
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;
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;
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, solar air-conditioning and energy plantations;
Develop and implement specific programs requiring the participation not only of government agencies and instrumentalities but also of the private sector;
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 processes or homes; and
Promulgate such rules and regulations as may be necessary to implement the objectives and provisions of Presidential Decree No. 1068.
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:
The following powers and functions are transferred to the Department:
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;
Study the importation of crude oil into the Philippines and determine its most economical sources, transportation routes, and freight rates;
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;
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
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.
The following powers and functions are transferred to the Bureau of Energy Utilization:
Assure that the petroleum industry, as a business vital to the national interest, operates under conditions of orderly and economic competition;
Protect gasoline dealers and distributors from unfair and onerous trade conditions;
Minimize the cost of, and the outflow of foreign exchange involved in, the operations of the industry;
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;
Regulate investments of oil companies in order to prevent monopoly, combinations in restraint of trade, unfair competition and economic domination;
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;
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;
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;
Take adequate steps to prevent monopolies and combinations in restraint of trade within the petroleum industry, or involving enterprises engaged in the petroleum industry;
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
Require all dealership agreement to be filed and registered with the Bureau as public documents.
The following powers and functions are transferred to the Board of Energy:
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;
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:
Whether claimed increases or decreases in costs, sales or profits are real or simulated;
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;
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
The cost and profit levels of the industry.
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;
License refineries that may be organized after the enactment of this Decree, under such terms and conditions as are consistent with the national interest;
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 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, 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;
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
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 requirements 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.
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:
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;
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;
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;
Promulgate rules and regulations relevant to procedures governing hearings before it and enforce compliance with any rule, regulation, order, or other requirement: Provided, That said rules and regulations shall take effect fifteen days after publication in the Official Gazette;
Perform such other acts as may be necessary or conducive to the exercise of its powers and functions; and
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:
Volume, weight, type, import price, and supplier of crude oil and petroleum products imported;
Tonnage, type, nationality and ownership of vessels used in importing crude oil and petroleum products, as well as shipping costs;
Audited financial statements of petroleum refineries and marketing companies;
Data on exported products, price of same, country of destination, and vessel used;
Listed wholesale price of gasoline on a monthly basis;
Posted and market prices crude oil at sources of importation and other known sources of crude oil supply; and
Cost of refining petroleum products.
The provisions of Section 16 of Republic Act No. 6173, as amended, shall continue to be effective.
The powers and functions of the Philippine National Oil Company relating to the regulation of oil or petroleum operations, as defined in Presidential Decree No. 334, as amended, including the importation of refined petroleum products, are hereby transferred to the Department or its bureaus as appropriate.