G.R. No. 159149 - Perez v. LPG Refillers Association of The Phils., Inc

THIRD DIVISION
[G.R. No. 159149. June 26, 2006.]
The HONORABLE SECRETARY VINCENT S. PEREZ, in his capacity as

the Secretary of the Department of Energy , petitioner, vs . LPG
REFILLERS ASSOCIATION OF THE PHILIPPINES, INC. , respondent.
DECISION
QUISUMBING , J : p
Before us is a petition for review on certiorari under Rule 45, assailing the Decision 1
and Order 2 of the Regional Trial Court of Pasig City, Branch 161, in SCA Case No. 2318,
which nullified Circular No. 2000-06-010 of the Department of Energy (DOE).
The facts are undisputed.
Batas Pambansa Blg. 33, as amended, penalizes illegal trading, hoarding,
overpricing, adulteration, underdelivery, and under lling of petroleum products, as well as
possession for trade of adulterated petroleum products and of under lled lique ed
petroleum gas (LPG) cylinders. 3 The said law sets the monetary penalty for violators to a
minimum of P20,000 and a maximum of P50,000. 4
On June 9, 2000, Circular No. 2000-06-010 was issued by the DOE to implement B.P.
Blg. 33, thus:
SECTION 4. NO PRICE DISPLAY BOARD —
LPG Marketer/LPG Dealer/LPG Retail Outlet
1st Offense - Reprimand/warning letter
2nd Offense - Recommend suspension of business

operation to the proper local government
unit
3rd Offense - Recommend business closure to the proper

local government unit and initiate criminal
proceedings
SECTION 5. NO WEIGHING SCALE —
A. LPG Refiller/Marketer
1st Offense - Fine of P5,000
2nd Offense - Fine of P10,000
3rd Offense - Recommend business closure
to the proper local government unit
B. Dealer
2nd Offense - Fine of P7,000
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3rd Offense - Recommend business closure to the
proper local government unit
C. LPG Retail Outlet
1st Offense - Reprimand
2nd Offense - Fine of P500.00
3rd Offense - Fine of P1,000.00
SECTION 6. NO TARE WEIGHT OR INCORRECT TARE WEIGHT

MARKINGS. (REQUIREMENT ON ENGRAVED TARE WEIGHT SHALL TAKE
EFFECT TWO (2) YEARS AFTER EFFECTIVITY OF THIS CIRCULAR)
1st Offense - Fine of P3,000 for each cylinder
2nd Offense - Fine of P5,000 for each cylinder
B. Dealer
SECTION 7. NO APPROPRIATE OR AUTHORIZED LPG SEAL
B. Dealer
SECTION 8. NO TRADE NAME, UNBRANDED LPG CYLINDERS, NO

SERIAL NUMBER, NO DISTINGUISHING COLOR, NO EMBOSSED
IDENTIFYING MARKINGS ON CYLINDER OR DISTINCTIVE COLLAR OR
DESIGN (REQUIREMENT ON SERIAL NUMBER AND DISTINCTIVE
COLLAR OR DESIGN SHALL TAKE EFFECT TWO (2) YEARS AFTER
EFFECTIVITY OF THIS CIRCULAR)
B. Dealer
SECTION 9. UNDERFILLED LPG CYLINDERS
A. LPG REFILLER/MARKETER
B. DEALER
C. LPG RETAIL OUTLET
SECTION 10. TAMPERING, ALTERING, OR MODIFYING OF LPG

CYLINDER THRU ANY MEANS SUCH AS BUT NOT LIMITED TO
CHANGING THE VALVE, REPAINTING, AND RELABELLING BY ANY
PERSON OR ENTITY OTHER THAN THE LEGITIMATE AND REGISTERED
OWNER OF THE SAME. FOR THIS PURPOSE, LPG REFILLER, MARKETER,
DEALER, OR RETAIL OUTLET, AS THE CASE MAY BE, WHO HAS
POSSESSION OF SUCH ILLEGALLY TAMPERED, ALTERED, OR
OTHERWISE MODIFIED LPG CYLINDER SHALL BE HELD LIABLE FOR
THIS OFFENSE
B. Dealer
SECTION 11. UNAUTHORIZED DECANTING OR REFILLING OF LPG

CYLINDERS
SECTION 12. HOARDING OF PETROLEUM PRODUCTS INCLUDING

LIQUEFIED PETROLEUM GAS
1st Offense - Fine of P10,000 per cylinder
2nd Offense - Recommend business closure to the
proper local government unit plus
the filing of appropriate criminal
action
SECTION 13. REFUSAL TO ALLOW OR COOPERATE WITH DULY

AUTHORIZED INSPECTORS OF THE ENERGY INDUSTRY
ADMINISTRATION BUREAU (EIAB) OF THE DEPARTMENT OF ENERGY IN
THE CONDUCT OF THEIR INSPECTION/INVESTIGATION, WHETHER
REGULAR AND ROUTINARY OR COMPLAINT-INITIATED
2nd Offense - Recommend business closure to the proper
local government unit
SECTION 14. REFUSAL OR FAILURE TO PAY FINE — The Department of

Energy shall recommend to the proper local government unit the closure of
business of a respondent who refuses or fails to pay any administrative fine
without prejudice to the filing of an appropriate criminal action if warranted. 5
Respondent LPG Re llers Association of the Philippines, Inc. asked the DOE to set
aside the Circular for being contrary to law. The DOE, however, denied the request for lack
of merit. AHCETa
Respondent then led a petition for prohibition and annulment with prayer for
temporary restraining order and/or writ of preliminary injunction before the trial court.
After trial on the merits, the trial court nulli ed the Circular on the ground that it
introduced new offenses not included in the law. 6 The court intimated that the Circular, in
providing penalties on a per cylinder basis for each violation, might exceed the maximum
penalty under the law. The decretal part of its Decision reads:
IN VIEW OF THE FOREGOING, this Court renders judgment declaring DOE
Circular No. 2000-06-010 null and void and prohibits the respondent from
implementing the same.
SO ORDERED. 7

The trial court denied for lack of merit petitioner's motion for reconsideration.
Hence this petition, raising the following issues:
I
WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "A
CLOSE SCRUTINY OF BP 33, PD 1865 AND R.A. NO. 8479 SHOWS THAT
OFFENSES LIKE NO PRICE DISPLAY [BOARD], NO WEIGHING SCALE, ETC. SET
FORTH IN THE CIRCULAR ARE NOT PROVIDED FOR IN ANY OF THE THREE (3)
LAWS".
II
WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "A
SCRUTINY OF THE NEW SET OF PENALTIES PROVIDED BY THE CIRCULAR
SHOWS THAT THE PENALTIES THIS TIME ARE BASED ON PER CYLINDER
BASIS"; THAT "BEING SUCH, NO CEILING WAS PROVIDED FOR AS TO THE
ADMINISTRATIVE FINES"; THAT "AS ILLUSTRATED BY THE PETITIONER, FOR
JUST ONE LPG CYLINDER FOUND VIOLATING AT LEAST SEC[TIONS] 6, 7, 8, 9, 10
AND 11 OF THE [CIRCULAR], A FINE OF P24,000.00 IS IMPOSED;" AND THAT
"THIS WILL CLEARLY BE BEYOND THE P10,000.00 PROVIDED BY THE LAWS."
III
WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT

SECTION 16 OF PETITIONER'S CIRCULAR WHICH AUTHORIZES THE IMPOSITION
OF PECUNIARY PENALTIES WITH THE TOTAL FINE NOT EXCEEDING P20,000.00
FOR RETAIL OUTLETS VIOLATES THE PENALTY CEILING OF P10,000.00 SET
UNDER BP BLG. 33, AS AMENDED.
IV
WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT
SINCE SECTION 5(g) OF R.A. 7638 FINDS NO REFERENCE IN DOE CIRCULAR NO.
2000-06-010, THE SAME SHOULD BE DISREGARDED.
V
WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "ON
THE NEW OFFENSES INTRODUCED IN THE CIRCULAR SUCH AS SECTIONS 4, 5,
10, 13 AND 14 AND THE IMPOSITION OF THE GRADUATED PENALTIES ON 'A
PER CYLINDER BASIS', THIS COURT FINDS [NO] REASON TO DISTURB ITS
FINDINGS THAT RESPONDENT-MOVANT EXCEEDED ITS AUTHORITY. . . . IT
SHOULD BE REMEMBERED THAT BP BLG. 33 AS AMENDED AND P.D. 1865 ARE
CRIMINAL STATUTES AND MUST BE CONSTRUED WITH SUCH STRICTNESS AS
TO CAREFULLY SAFEGUARD THE RIGHTS OF THE DEFENDANT."
VI
WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING THAT "THE

ASSAILED CIRCULAR SETS NO MAXIMUM LIMIT AS TO THE FINE THAT MAY BE
IMPOSED ON AN ERRING PERSON OR ENTITY TO WHICH FACT MOVANT
CONCEDES. FOR ONE (1) CYLINDER ALONE, NOT ONLY DOES THE CIRCULAR
MAKE THE FINE EXCESSIVE TO THE EXTENT OF BEING CONFISCATORY, BUT IT
EVEN IMPOSES A PENALTY WHICH MAY EVEN GO BEYOND THAT MAXIMUM
IMPOSABLE FINE OF P50,000.00 SET BY P.D. 1865 IN ITS SEC. 4 AFTER A
CRIMINAL PROCEEDING." 8
To our mind, the issue raised by petitioner may be reduced to the sole issue of
whether the Regional Trial Court of Pasig erred in declaring the provisions of the Circular
null and void, and prohibiting the Circular's implementation.
Petitioner argues that the penalties for the acts and omissions enumerated in the
Circular are sanctioned by Sections 1 9 and 3-A 1 0 of B.P. Blg. 33 and Section 23 1 1 of
Republic Act No. 8479. 1 2 Petitioner adds that Sections 5(g) 1 3 and 21 1 4 of Republic Act
No. 7638 1 5 also authorize the DOE to impose the penalties provided in the Circular.
Respondent counters that the enabling laws, B.P. Blg. 33 and R.A. No. 8479, do not
expressly penalize the acts and omissions enumerated in the Circular. Neither is the
Circular supported by R.A. No. 7638, respondent claims, since the said law does not
pertain to LPG traders. Respondent maintains that the Circular is not in conformity with the
law it seeks to implement.
We resolve to grant the petition. AaDSTH
For an administrative regulation, such as the Circular in this case, to have the force
of penal law, (1) the violation of the administrative regulation must be made a crime by the
delegating statute itself; and (2) the penalty for such violation must be provided by the
statute itself. 1 6
The Circular satis es the rst requirement. B.P. Blg. 33, as amended, criminalizes
illegal trading, adulteration, under lling, hoarding, and overpricing of petroleum products.
Under this general description of what constitutes criminal acts involving petroleum
products, the Circular merely lists the various modes by which the said criminal acts may
be perpetrated, namely: no price display board, no weighing scale, no tare weight or
incorrect tare weight markings, no authorized LPG seal, no trade name, unbranded LPG
cylinders, no serial number, no distinguishing color, no embossed identifying markings on
cylinder, under lling LPG cylinders, tampering LPG cylinders, and unauthorized decanting
of LPG cylinders. These speci c acts and omissions are obviously within the
contemplation of the law, which seeks to curb the pernicious practices of some petroleum
merchants.
As for the second requirement, we nd that the Circular is in accord with the law.
Under B.P. Blg. 33, as amended, the monetary penalty for any person who commits any of
the acts aforestated is limited to a minimum of P20,000 and a maximum of P50,000.
Under the Circular, the maximum pecuniary penalty for retail outlets is P20,000, 1 7 an
amount within the range allowed by law. However, for the refillers, marketers, and dealers,
the Circular is silent as to any maximum monetary penalty. This mere silence, nonetheless,
does not amount to violation of the aforesaid statutory maximum limit. Further, the mere
fact that the Circular provides penalties on a per cylinder basis does not in itself run
counter to the law since all that B.P. Blg. 33 prescribes are the minimum and the maximum
limits of penalties.
Clearly, it is B.P. Blg. 33, as amended, which de nes what constitute punishable acts
involving petroleum products and which set the minimum and maximum limits for the
corresponding penalties. The Circular merely implements the said law, albeit it is silent on
the maximum pecuniary penalty for re llers, marketers, and dealers. Nothing in the Circular
contravenes the law.
Noteworthy, the enabling laws on which the Circular is based were speci cally
intended to provide the DOE with increased administrative and penal measures with which
to effectively curtail rampant adulteration and shortselling, as well as other acts involving
petroleum products, which are inimical to public interest. To nullify the Circular in this case
would be to render inutile government efforts to protect the general consuming public
against the nefarious practices of some unscrupulous LPG traders.
WHEREFORE, the petition is GRANTED. The assailed Circular No. 2000-06-010 of
DOE is declared valid. The Decision and Order of the Regional Trial Court of Pasig City,
Branch 161, in SCA Case No. 2318, nullifying said Circular and prohibiting its
implementation are hereby REVERSED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
Carpio, Carpio Morales, Tinga and Velasco, Jr., JJ., concur.
Footnotes
1. Rollo, pp. 64-72. Penned by Judge Alicia P. Mariño-Co.
2. Id. at 73-77.
3. SEC. 2. Prohibited Acts. — The following acts are prohibited and penalized:
(a) Illegal trading in petroleum and/or petroleum products;
(b) Adulteration of finished petroleum products, or possession of adulterated
finished petroleum products for the purpose of sale, distribution, transportation,
exchange or barter;
(c) Underdelivery or underfilling beyond authorized limits in the sale of petroleum

products or possession of underfilled liquefied petroleum gas cylinder for the purpose of
sale, distribution, transportation, exchange or barter;
xxx xxx xxx
[(b)] (D) Hoarding of petroleum and/or petroleum products;

[(c)] (E) Overpricing in the sale of petroleum products;
[(d)] (F) Misuse of petroleum allocations;
[(e)] (G) Speed contests and rallies involving mainly the use of motor vehicles, motor-
driven watercraft or aircraft utilizing petroleum-derived fuels, including car and
motorcycle rallies and drag racing, without the permit from the Bureau of Energy
Utilization; and
[(f)] (H) Sky-diving, and water-skiing except when methanol is used for the power-boat
operation.
4. SEC. 4. Penalties. — Any person who commits any act herein prohibited shall, upon
conviction, be punished with a fine of not less than [two] TWENTY thousand pesos
[(P2,000)] (P20,000) but not more than [Ten] FIFTY thousand pesos [(P10,000)]
(P50,000). . . .
5. Rollo, pp. 274-280.
6. Batas Pambansa Blg. 33 (1979), Presidential Decree No. 1865 (1983), or Republic Act
No. 8479 (1998).
7. Rollo, p. 72.
8. Id. at 500-502.
9. SECTION 1. Declaration of Policy . — It is the declared policy of the State to
institutionalize as a national way of life energy conservation geared towards the
judicious and efficient use of energy in order to enhance availability of energy supplies
required to support economic, social and developmental goals. In view of the continuing
uncertainty of the international oil supply, it is imperative that measures to conserve
energy be strengthened and that acts and activities involving petroleum and/or
petroleum products contrary to the intent and spirit of judicious usage and conservation
of energy, which are inimical to the public interest and national security, be prohibited
and appropriate sanction therefor be imposed.
10. Section 3-A (inserted by Section 3 of PD No. 1865) reads:

"SEC. 3-A. Rules and Regulations; Administrative sanctions for violation thereof. —
The Bureau of Energy Utilization shall issue such rules and regulations as are necessary
to carry into effect the provisions of this Act, subject to the approval of the Minister of
Energy, after consultation with the affected industry sectors. Said rules and regulations
shall take effect fifteen (15) days from the date of its publication in two (2) newspapers
of general circulation.
"The Bureau of Energy Utilization is empowered to impose in an administrative

proceeding, after due notice and hearing, upon any person who violates any provision of
such rules and regulations, a fine of not more than ten thousand pesos (P10,000.00) or
to suspend or remove the license or permit of a hauler, marketer, refiller, dealer, sub-
dealer or retail outlet: Provided, That hearing in any administrative proceedings may be
waived by respondent. Provided, Further, That during the pendency of such
administrative proceeding, the Bureau may suspend the business operations of such
hauler, marketer, refiller, dealer, sub-dealer or retailer or retail outlet operator when the
suspension is consistent with public interest. . . .
xxx xxx xxx

"The administrative sanction that may be imposed shall be without prejudice to the
filing of a criminal action as the case may warrant."
11. SEC. 23. Implementing Rules and Regulations. — The DOE, in coordination with the
Board, the DENR, DFA, Department of Labor and Employment (DOLE), Department of
Health (DOH), DOF, DTI, National Economic and Development Authority (NEDA) and
TLRC, shall formulate and issue the necessary implementing rules and regulations
within sixty (60) days after the effectivity of this Act.
12. AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY, AND FOR OTHER
PURPOSES.
13. SEC. 5. Powers and Functions. — The Department shall have the following powers and
functions:
xxx xxx xxx

(g) Formulate and implement programs, including a system of providing
incentives and penalties, for the judicious and efficient use of energy in all energy-
consuming sectors of the economy;
14. SEC. 21. Appropriations. — . . .
Subject to existing rules and regulations, the funds and monies collected or which
otherwise come into the possession of the Department and its bureaus from fees,
surcharges, fines and penalties which the Department and its bureaus may impose and
collect under this Act, . . . shall be disbursed for expenses necessary for the effective
discharge of the powers and functions of the Department under this Act.
15. AN ACT CREATING THE DEPARTMENT OF ENERGY, RATIONALIZING THE
ORGANIZATION AND FUNCTIONS OF GOVERNMENT AGENCIES RELATED TO ENERGY,
AND FOR OTHER PURPOSES.
16. See United States v. Panlilio, 28 Phil. 608, 613-614 (1914).
17. DOE Circular No. 2000-06-010.
SEC. 16. Maximum Total Penalty. In the imposition of pecuniary penalties the total
fine shall not exceed Twenty Thousand Pesos (P20,000.00) for retail outlets.

G.R. No. 159149 - Perez v. LPG Refillers Association of The Phils., Inc

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G.R. No. 159149 - Perez v. LPG Refillers Association of The Phils., Inc

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THIRD DIVISION

[G.R. No. 159149. June 26, 2006.]

The HONORABLE SECRETARY VINCENT S. PEREZ, in his capacity as

LPG Marketer/LPG Dealer/LPG Retail Outlet

1st Offense - Reprimand/warning letter

2nd Offense - Recommend suspension of business

3rd Offense - Recommend business closure to the proper

SECTION 5. NO WEIGHING SCALE —

SECTION 6. NO TARE WEIGHT OR INCORRECT TARE WEIGHT

SECTION 7. NO APPROPRIATE OR AUTHORIZED LPG SEAL

SECTION 8. NO TRADE NAME, UNBRANDED LPG CYLINDERS, NO

SECTION 9. UNDERFILLED LPG CYLINDERS

SECTION 10. TAMPERING, ALTERING, OR MODIFYING OF LPG

SECTION 11. UNAUTHORIZED DECANTING OR REFILLING OF LPG

SECTION 12. HOARDING OF PETROLEUM PRODUCTS INCLUDING

SECTION 13. REFUSAL TO ALLOW OR COOPERATE WITH DULY

SECTION 14. REFUSAL OR FAILURE TO PAY FINE — The Department of

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WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT

WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING THAT "THE

(c) Underdelivery or underfilling beyond authorized limits in the sale of petroleum

[(b)] (D) Hoarding of petroleum and/or petroleum products;

10. Section 3-A (inserted by Section 3 of PD No. 1865) reads:

"The Bureau of Energy Utilization is empowered to impose in an administrative

xxx xxx xxx

xxx xxx xxx

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