Republic of the 'Philippines

DEPARTMENT' OF ENERGY

DEPARTMENT CIRCULAR - NO. ,DC.2011 – 02 – 0001

MANDATORY USE OF BIOPUEL BLEND

WHEREAS, Section 5...2 of Republic Act No. 9367 or the "Biofuel's Act of 2006"
provides:

"Within four years from the effectivity of this Act, the NBB created under
this Act i s e m p o w e r e d t o d e t e r m i n e t h e f e a s i b i l i t y a n d t h e r e a f t e r
recommend to DOE to mandate a minimum of ten percent (1 0%) blend of
bioethanol by volume into all gasoline fuel distributed and sold by each and
every oil company in the country."

WHEREAS, the Department of Energy (DOE) recognizes and adheres to the policy,
objectives and mandate of the Biofuels Act of2006.;

WHEREAS, after extensive public consultation with all stakeholders in 2009-2011,

including scientific tests and studies conducted by technical -experts, the National
Biofuels Board (NBB) -established the viability of implementing the general mandate of
ten percent (10%) for 'bioethanol sold and distributed •by every oil company under
specific terms and conditions;

WHEREAS, in a resolution dated February 3, 201, the NBB recommended to the DOE 'the
implementation of the general Mandate of ten percent (10%) blend of bioethanol for
gasoline fuel under specific ,terms and conditions and the conduct of further public
consultation to determine the feasibility of increasing the current two percent (2%) blend
for biodiesel;

NOW, THEREFORE, in consideration of all the foregoing, the DOE hereby issues,
adopts and promulgates the following mandatory use of biofuel blend:

Section 1 Scope and Application. This Circular shall apply to all participants in the
downstream oil industry and the-local biofuel producers.

Section 2.
Adherence to Declared State Policy By this Circular, the DOE strictly
adheres to the importance and significance of the objective of the Biofuels
Act of 2006 to mandate the use of biofuels /13 a measure to, among others,
develop and utilize indigenous renewable and sustainably-sourced clean
energy sources to reduce dependence on imported oil, mitigate toxic and
greenhouse gas emissions, increase rural employment and income and
ensure availability of alternative and renewable clean energy without any

Energy Center, Merritt Rd., Fort Bonitacio, iaguig City, Metro Manila, Philippines
Fax #817-61-94 Tell 840-20-08 Fax # 840-21-38 Tel # 1340-22-36 Fax # 84017-31 Tel # 817-86-03 Trunkline 479-29.00
Website: www.doe.nov.ph, E-mail: inlo(cbdoe.aov.ph
Section 4. Biodiesel Blend.

4.1 Full Compliance. Upon the determination by the NBB. the mandate
under the Biofuels Act of 2006 far - the mandated two percent (2%) blend of biodiesel by volume
pursuant to the PNS has been sufficiently achieved and complied with.

4.9 P u b l i c C o n s u l t a t i o n s . Consistent with the recommendation of the NBB

and considering the supply local biodiesel production in excess of local requirements, the DOE, together
with the NBB, shall conduct further public consultations ire .2011, to determine the feasibility of
further _increasing the current biodiesel blend.
Section 5. Effectivity and Publication. This Circular shall he effective immediately
upon its publication in two (2) newspapers of genera] circulation and shall
remain in effect .-until revoked.

Fort Bonifacio, Taguig City, Metro Manila. February 6_ 2011.

JOS :RENE 'D. ALMENDRAS

Secretiry wraiotriegur
REPLYIWO [ME:

11111.
 EPIRA (R. A. 9136)

Republic of the Philippines

DEPARTMENT OF ENERGY
(Kagawaran ng Enerhiya)

SEARCHDOE
A (I ;6)
What is the ELECTRIC POWER INDUSTRY E]
ENERGYSTATISTICS REFORM ACT of 2001 (RA. 9136)?

On June 8, 2001, President Gloria Macapagal-Arroyo

signed into law Republic Act 9136, or the Electric Power
Industry Reform Act of 2001. The said enactment was the
ELECTRICPOWER culmination of more than seven years of public hearings
__________________________________________ and floor deliberations on various versions of the said
PHILI measure in Congress. Among other benefits, RA 9136 is
PPINE POWER STATISTICS
designed to bring down electricity rates and to improve the
delivery of power supply to end-users by encouraging
greater competition and efficiency in the electricity
ind u st ry. Th e e ssen ce o f th ese ref o rms is g ivin g
stakeholders a CHOICE.
Consumer Empowerment This can be achieved by
giving consumers the power to choose their source of
electricity from among a host of generators and
suppliers of electricity.

Higher Efficiency. Consumers will be assured of

adequate and reliable power supply at lower rates.

O p e n A c ce s s . Th e r e w i l l b e o p e n a c c e s s t o
transmission and distribution network/ facilities so
that the benefits of competition in the
generation/supply sector could really trickle down to
the consumers.

Industry Accountability. There will be higher levels of

environmental, health and safety standards. Non-
complying companies will be subject to appropriate
fines and penalties. There will be higher levels of
environmental, health and safety standards. Non -
complying companies will be subject to appropriate
fines and penalties.

Competition in Generation and Supply. There will be

competition between and among generating
companies where prices will be market-driven and
competitive. There will be long-term contracts and a
spot market where the trading of electricity between
buyers and sellers will be undertaken. There will be
 10/30/13 EPIRA (R. A_ 9136)

com p e t i t i o n
between and among generating
companies where prices will be market-driven and
competitive. There will be long-term contracts and a
spot market where the trading of electricity between
buyers and sellers will be undertaken.

Electricity Tariff Unbindin. This includes the

itemization and the segregation of various
components of electricity tariffs to make the rates
more transparent. With rates unbundled, customers
will be able to know how much they would be paying
for generation, transmission, distribution and other
benefits or charges.

These reforms are aimed at making sure our country will

have reliable and competitively priced electricity. The
strategy is to put an end to monopolies that breed
inefficiency, encourage the entry of many more industry
players, and generate competition that will benefit
consumers in terms of better rates and services.

In other countries, a restructured and competitive power

sector has provided consumers with lower power rates. We
look around us and find that the same pattern can be seen
in local industries that have been de-monopolized and
deregulated like telecommunications and inter-island
shipping.

The privatization or sale of NPC's generating power plants

to several companies will trigger competition, on the
generation side. In addition, its privatization will allow
government to shift the burden of ensuring continuous
financing for the construction, operation and maintenance
of hugely capital-intensive power generating plants to the
private sector.

Now that RA 9136 is in place, what reforms will be

instituted in the power industry?

Two major reforms are embodied in RA 9136, namely, the

restructuring of the electricity supply industry and the
privatization of the National Power Corporation (NPC). The
restructuring of the electricity industry calls for the
separation of the different components of the power sector
namely, generation, transmission, distribution and supply
(please see diagram on page 2). On the other hand, the
privatization of the National Power Corporation (NPC)
involves the sale of the state-owned power firm's generation
a n d t ra n s mi ss io n a sse t s ( e . g . , p o we r p la n t s a n d
transmission facilities) to private investors. These two
reforms are aimed at encouraging greater competition and
at attracting more private-sector investments in the power
industry. A more competitive power industry will in turn

www.doe.gov.ph/electric-power-statistics/199-energy-fagslfaci s-epira-ra9136/755-faq s-epira-ra9136 217

 10/30/13 EPIRA (R. A. 9136)

result in lower power rates and a more efficient delivery of

electricity supply to end-users.

With restructuring, will the power industry be fully

deregulated? How can government ensure that consumers
will be protected from undue and frequent increases in
power rates?

No, only generation and supply will be deregulated.

Distribution and transmission will continue to be regulated
by the Energy Regulatory Commission (ERC). Under RA
9136, government will create an independent, quasi-judicial
regulatory body called the Energy Regulatory Commission
(ERC) to replace the Energy Regulatory Board. The
Commission will be made up of a Chairman and four
Commissioners, all of whom will be appointed by the
President of the Philippines. The ERC will be tasked to
promote competition in the power sector, encourage
market development and ensure customer choice.
Compared to its predecessor, the ERC will have stronger
and broader powers in the sense that it will be authorized
not only to correct but to prevent and penalize anti -
competitive practices. It will also be given certain rate-
setting functions.

Are there any safeguards in the law to prevent

certain business groups or blocs from dominating the
restructured power industry?

To promote true competition and prevent monopolistic

practices, RA 9136 provides for explicit caps or limits on
the volume of electricity that a distribution utility can buy
from an affiliated company that is engaged in power
generation. Likewise, the law also provides that "no
company or related group can own, operate or control more
than 30 percent of the installed capacity of a grid and/or 25
percent of the national installed generating capacity".

How sure are we that power rates will indeed go down? Are
there any pro-poor provisions in RA 9136?

Under RA 9136, NPC is mandated to reduce its rates for

residential consumers by 30 centavos per kilowatt-hour
immediately upon the effectivity of the said law. It also
provides for a subsidized "lifeline" rate for marginalized or
low-income electricity consumers. This will ensure that
such consumers will not have to contend with higher power
rates even when the cross-subsidies on electricity tariffs
are removed with the restructuring of the power sector.
Finally, the bill mandates NPC to carry on with its
missionary function of providing electricity to non-viable,
far-flung areas in the countryside even after its privatization.

How will the privatization of NPC be carried out?

www.doe.gov.phielectric-pcmer-statistics/199-energy-facistraqs-epira-ra9136/755-faqs-epira-ra9136 3/7
 10130/13 EPIRA (R. A. 9136)

Under RA 9136, NPC's generation and transmission

facilities, real estate properties and other disposable
assets, as well as its existing power supply contracts with
independent power producers (IPPs), shall be privatized.
The exact manner and mode by which these assets will be
sold will be determined by the Power Sector Assets and
L ia b il it ie s Ma n a g e m e n t (P S A L M ) Co rp o ra t io n , a
government-owned and —controlled corporation that will
take over the ownership of all of NPC's assets. PSALM will
also be tasked to manage the orderly sale, disposition and
privatization of NPC, with the objective of liquidating all of
NPC's financial obligations and stranded contract costs in an
optimal manner.

How can government ensure that the proceeds from the

sale of NPC assets will be optimized?

A set of criteria in the grouping of NPC assets will be

considered. These criteria include financial viability,
efficiency of operations, and management and operational
synergy. Furthermore, all assets of NPC shall be sold in a
open and transparent manner through public bidding.

Will NPC power plants that run on hydro and steam

be privatized also?

Initially, NPC's Agus and Pulangui hydroelectric power

complexes, both located in Mindanao, shall be excluded
from the privatization program. Its privatization will be left to
the discretion of the PSALM Corp., in consultation with
Congress. RA 9136 further specifies that the two hydro
plants may not be privatized earlier than 10 years from the
effectivity of the said law.

As for NPC's geothermal facilities (e.g., Tiwi-Makban,

Leyte A and B (Tongonan), Palinpinon and Mt. Apo), RA
9136 states that the steamfield assets and the power
plants of each of the said complexes shall not be sold
separately. Rather, they shall be combined and each
complex will be sold as one package through a public
bidding.

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www.doe.gov.phielectric-power-statistics/199-energ y-facis/faq s-epira-ra9136/755-faq s-epira-ra9136 417

 Republic of the Philippines
DEPARTMENT OF ENERGY

04 April 2013

Mr. Jaime Renato B. Gatmaytan

Gatmaytan Yap Patacsil Guitierrez &
Protacio
30/F 88 Corporate Center
Sedeno corner Valero Streets,
Salcedo Village, Makati City

Dear Mr. Gatmaytan:

In response to your 11 March 2013 letter requesting DOE's endorsement of the Amended Articles of
Incorporation of Natura Mindanao Inc. ("Natura Mindanao"), please be advised that DOE only endorses
businesses that engage in petroleum products including lubricating oil/grease. This scope is defined in detail
under Section 5 of Department Circular No. 98-03-004 (Rules and Regulations Implementing Republic Act
8479, "Downstream Oil Industry Deregulation Act of 1998"). Since fuel additive is not considered a
petroleum product, businesses engaged to same are not covered by DOE endorsement.

However, please be guided that Department Circular No. DC 2007-02-0001 (Guidelines Implementing the
Registration of Fuel Additives Under R.A. No.s 8479 and 8749) provides the requirement to register to DOE
fuel additives prior to its manufacture, importation, market and use. A certificate shall then be issued by DOE
for permanent registration of an additive after full compliance of the requirement.

We hope that we enlighten you on this matter. Very

truly yours,

ZENAI Y. MO NSA DA
Director

CC: Mr. Benito A. Cotaran

Director, Company Registration and
Monitoring Department, SEC

Energy Center, Merritt Rd., Fort Bonifacio, Taguig, Metro Manila. Philippines
Tel. Nos.: (Trunkline) 840-1401 to 21; Fax 840-1731; 840-2138; 840-2067 ; (632) 840-1731; (632) 840-2138; Telefax (632) 840-2067
Website: www.doe.gov.ph, E-mail: info@doe.gov.ph
 Republic orthe Philippines page 2
DEPARTMENT OF ENERGY
b.Average Variable Cost refers to the sum of all variable costs divided by
the number of units of outputs;
DEPARTMENT CIRCULAR NO. 98-03-004
c.Basel Convention refers to the international accord which governs the
trade or movement of hazardous and toxic waste across borders;
Rules and Regulations
Implementing Republic d.Board refers to the Energy Regulatory Board;
Act 8479, "Downstream Oil Industry Deregulation Act of e.BOI refers to the Board of Investments;
1998" .
f. BPS refers to the Bureau of Product Standards of the DTI;

g.Bulk Supplier refers to a person or entity engaged in the sale of

Pursuant to Chapter Vii, Section 23 of Republic Act 8479, "Downstream Oil
industry Deregulation Act of 1998," the Department of Energy, in
coordination with the Energy Regulatory Board, Department of Environment and
Natural Resources, Department of Foreign Affairs, Department of Labor and
Employment, Department of Health, Department of Finance, Department of
Trade and Industry,• National Economic and Development Authority and
Technology and Livelihood Resource Center, hereby issues, adopts and
promulgates the following rules and regulations to implement the Act.
RULE I — GENERAL PROVISIONS
SECTION 1. Title
These rules shall be known and cited as the "Implementing Rules and
Regulations ORR) of the Downstream Oil Industry Deregulation Act of 1998."
SECTION 2. Coverage
petroleum products in bulk;
h.Bureau refers to the Energy Industry Administration Bureau of the
DOE;
Cartelization refers to any agreement, combination or concerted action
by refiners, importers and/or dealers, or their representatives, to fix
prices, restrict outputs or divide markets, either by products or by
areas, or allocate markets, either by products or by areas, in restraint
of trade or free competition, including any contractual stipulation which
prescribes pricing levels and profit margins;
j. Crude Oil refers to the oil in its natural state before the same has been
refined or otherwise treated, but excluding water, bottoms, sediments
and foreign substances;
k. Dealer refers to any person, whether natural or juridical, engaged in
the marketing and direct selling of petroleum products to motorists, end
users; and other consumers;

1. DENR refers to the Department of Environment and Natural

These rules shall apply to all persons or entities engaged in any, a Resources;
combination of, or all activities or business of the downstream oil industry, such as
importing, exporting, re exporting, shipping, transporting processing, refining, storing,
-
m. DFA refers to the Department of Foreign Affairs; •
distributing, marketing, and/or selling of crude oil, gasolines, diesel, fuel oils,
aviation fuels, liquefied petroleum gas, kerosene, and other petroleum products n. DOE refers to the Department of Energy;
as herein defined, as well as persons or companies directly importing refined
petroleum products for their own use or requirement. This shall likewise 0. DOF refers to the Department of Finance;
include the activities or business of blending, recycling, and/or re processing of
petroleum products. p. DOH refers to the Department of Health;
q. Dal refers to the Department of Justice;
SECTION 3. Definition of Terms
The terms used in this 1RR shall have the following respective meanings:
-

a. Act refers to Republic Act 8479;

Energy Center, Merritt Road, Fort Boritfacio Teguig. Metro Manila. Philippines
Tels.: (Trunks) 844-10-21 to 40: Fax 817-8603; 644-35-04: 843-6438 [Domestic); 632 817-8603; 632844-35-04; 632 843-5436 (International)
mm.Retiiiing Plant refers to any Downstream Oil
installation that has LPG bulk storage Industry
and filling/refilling facilities for
page 5 page 6

bottling LPG;
nn.Refiller refers to an LPG marketer
who buys LPG in bulk from bulk
suppliers, refills LPG into cylinders
under his own brand name or that
of other LPG marketers, and sells
the same to his dealers, whether in
bulk or retail to his customers;
oo.Refiner refers to any person
who 'locally refines through
distillation, conversion and
treatment of crude oil and
other naturally occurring
petroleum hydrocarbons; and
Any person who intends to
engage in the business of importing,
exporting, re-exporting, refining,
processing, manufacturing, blending,
recycling, and/or reprocessing,
shipping, transporting, transshipping,
storing, distributing, and marketing
and/or selling of crude oil, gasoline,
diesel, LPG, kerosene, and other
petroleum products, and in any similar
activities, shall file a notice with the
Bureau, prior to Initial engagement
in the proposed activity or prior to
construction of the petroleum products
facilities, as the case may be.

pp. Variable Cost refers to costs All notices shall be in writing,

such as utilities or raw
materials, which vary as the
output increases or
decreases.
addressed to the Bureau, and shall
contain the following information, as
may be applicable:
a. Business name, address,
telephone/fax number; -

RULE II - LIBERALIZATION OF
DOWNSTREAM OIL INDUSTRY .

AND TARIFF TREATMENT

SECTION 4. Liberalization of
Downstream Oil industry

Any person may import or

purchase any quantity of crude oil
and petroleum products from foreign or
domestic source, lease or own and
operate refineries and other downstream
oil facilities and market such crude oil
and petroleum products either in a
generic name or his or its own trade
name, or use the same for his or its
own requirement: Provided, That, such
person shall comply with the notice,
reportorial, quality, health, safety and
environmental. requirements as set forth
in this IRR.

SECTION 5. Notice Prior to

Engagement in
any Activity or
Business in the
 b.Project or business plan Nuclear Wastes Control Act. Of gar, in
indicating the scope of accordance with the Basel Convention.
operation/activity;
c.List of facilities and proof of
tie availability of such SECTION 7. Reportorial
facilities to support the
Requirements
proposed business/
d.Business permits such as
Mayor's permit, Securities Any person who is engaged , or
and Exchange intends to engage in any activity or,
Commission (SEC DTI business in the downstream oil industry
registration; shall submit the following reportorial
e. Building permit; requirements to the Bureau:
f.Locational/ zoning
clearance; and
g.Other local government
permits/clearances.

Any person already legally

engaged in any activity in the
downstream oil industry upon the
effectivity of this 1RR is deemed to
have complied with this notice
requirement.

SECTION 6. Notice Prior to Every

Importation

For effective monitoring, and

to ensure conformance to the Basel
Convention, any person who shall
import crude oil and/or petroleum
products from foreign countries, free
ports and economic zones, whether for
trade or for his own use or requirement,
shall file a notice with the Bureau prior
to actual loading of every importation,
indicating details and/or accompanying
documents related to the importation,
as follows:

a.type and quantity of cargo;

b.the estimated date of loading
and arrival;
c.supplier of cargo;
d.FOB price, freight and
insurance cost;
e.vessel particulars;
f.port of loading and discharge;
g.guaranteed specification of the
product; and
h.proforma invoice

In the case of importations of

slop/used/waste oils, sludges and similar
petroleum products/by-products,
such notice shall be accompanied by
a clearance from the EMB/DENR
pursuant to RA 696g, otherwise known as
'Toxic Substances, Hazardous and
 page 9

basis, in the format to be prescribed for this purpose. Submissions are

due on the fifteenth (15th)-day of the month.

For those engaged SECTION 8. 'Tariff

in the petroleum products
business as bulk supplier, Pursuant to Section
they shall submit the 6(a) of the Act, a single and
following data to the Bureau uniform tariff duty shall be
on or before January 15 of imposed and collected both
each year: on imported' crude oil and
imported refined petroleum
(1)List of the names products at the rate of three
and addresses percent (3%): Provided,
of their however, That the President
dealersibuyers: of the Philippines may, in the
.
exercise of his powers, reduce
such tariff rate when on his
(2)Annual volume judgment such reduction -is
of petroleum warranted, pursuant to
products Republic Act No. 1937, as
supplied to amended, otherwise known
each as the "Tariff and Customs
dealer/buyer, Code': Provided, further, That
and beginning on January 1, 2004
or iipon implementation of
(3)Lists of the Uniform Tariff Program
name • under the World Trade
s and Organization and ASEAN Free
busin Trade Area commitments, the
ess tariff rate shall be
addre automatically adjusted to the
sses appropriate level
of notwithstanding the
autho provisions under the
rized aforementioned Section.
petro
leum
prod a. NPC Exemption
uct
haule Pursuant to
rs. Section 6(b) of the
Act, for as long as
9. Penal Provision the National Power
Corporation (NPC)
Failure to comply enjoys exemptions
with the reportorial from taxes and duties
requirements shall on petroleum
constitute violation of and products used for
shall be penalized under power generation, the
Section 12 of the Act. exemption shall apply
to purchases through
the local refineries and
to the importation of fuel
oil and diesel.

page 10

RULE Ill - FAIR TRADE

PRACTICES
AND
PROMOTION
OF FREE
COMPETITIO
N •

SECTION 9. Promotion of Fair Trade

Practices.

The DT1 and DOE shall take

all measures to promote fair trade
and prevent cartelization, monopolies,
combinations in restraint of trade and
any unfair competition in the Industry
as defined in Article 186 of the Revised
Penal Code, and Articles 168 and 169
of Republic Act No. 8293, otherwise
known as the - Intellectual Property
Rights Law."

a. Joint Industry Activities.

To serve the public

interest, achieve efficiency and
cost reduction, ensure
continuous supply of
petroleum products, and
enhance environmental
protection, the DOE shall
continue to encourage joint
industry activities, which may
include borrow-and-loan-
agreements, rationalized depot
and manufacturing operations,
hospitality agreements, joint
tanker and pipeline utilization,
and joint actions on oil spill
control and fire prevention.
Participants to these joint
industry activities, either as a
group or individual, shall
inform the DOE, through the
Bureau, of occurrences and
details of such activities.
SECTION 10. Monitoring and Arbitration For purposes of such
by the DOE monitoring, within three (3)
months from the effectivity of the
a.Monitoring IRR, the oil companies shall
provide the DOE, through the
To help ensure the Bureau, with copies of all
observance of fair and equitable existing contracts between
practices and to ensure the them and their dealers,
enforcement of existing contracts, the haulers, and LPG distributors.
DOE shall monitor the relationship
between the oil companies (refiners b.Arbitration and
Conciliation
and importers) and their dealers,
haulers and LPG distributors.

(1) Disputes subject to arbitration

page 13 (7)Time for rendering award

The written award of the Arbitrator

better understanding and
shall be rendered within thirty (30) days
determination of the
after the closing of the hearings, or if the_oral
dispute. •
hearings shall have been waived, within thirty
(30) days after the Arbitrator shall have
(4).Format offer of
declared such proceedings as closed.
evidence
In the event that the parties to an
The parties shall
arbitration have; during the course of such
make a formal offer of
arbitration, settled their dispute, 'they may
evidence.
request the Arbitrator that such settlement be
embodied in an award, which shall be signed
(5)Appreciation of evidence
by him.
The Arbitrator shall be
the sole judge of the
relevancy and materiality of (8)Form of award
the evidence offered or
The award must be made in writing and
produced and shall not be signed by the DOE Secretary.
bound to conform to the
Rules of Court pertaining to
evidences. He shall have his
award on the evidence
submitted. He shall receive
as exhibits in evidence any
document, which the parties
may wish to submit, and the
exhibits shall be properly
identified and marked at
the time of submission.

(6)Submission of
memoranda

The Arbitrator may

require the parties to submit
their respective memoranda.
A definite time limit for the
filing of such memoranda
shall be fixed by the
arbitrator at the close of the
hearing.
page 14 rti es m ay sub mit
an ag reed
(9) statement of
Pr facts. They may
oc also submit their
ee respective
di contentions to the
ng Arbitrator in
s writing which shall
in include a statement
lie of facts, together
u with all
of documentary
he proof. Parties may
ar also submit a
in written argument.
g Each party shall
provide all other
T parties to the
he dispute with a copy
par of all statements
ties and documents
ma submitted to the
y, Arbitrator. Each
by party shall have an
wri opportunity to
tte reply in writing to
n any other party's
agr statements and
ee proofs, but if such
me party fails to do so
nt, within seven (7)
sub days after receipt
mit of such statements
thei and proofs, he shall
r be deemed to .
dis have waived his
put right to reply. Upon
e the delivery to the
to Arbitrator of all
arb statements and
itra documents,
tion together with any
by reply statements, the
a Arbitrator shall
mo declare the
de proceedings in lieu
oth of hearing closed.
er
tha (10)Reconsideratio
n n
oral
he Any motion
ari for reconsideration
ng . of any award by
Th the Arbitrator shall
e be filed with the
pa DOE Secretary
 wi (11}Judicial Review
thi
n Any appeal
fift that may be taken
ee from an award shall
n be instituted by
(1 certiorari and the
5) proceedings thereof
da shall be governed
ys by the Rules of
fro Court, as these
m are applicable.
. re
cei
pt
of SECTION 11. Program to
th Encourage the
e Entry of New
a Participants in the
w Industry
ar
d Pursuant to Section 8 of the Act, the
by DOE, the DFA and the DTl shall jointly
th formulate and establish a program that will
e promote the entry of new participants in the .

ad Industry. This program shall commence after

ve three (3) months f r o m t h e
rs e f f e c t i v i t y o f t h e A c t .
e 4 .
pa
rty
.
page 17 maintenance, and other operating
expenses; ninety-four percent
(94%) shall be used exclusively
lending agencies, in the form of
for lending and financial
medium-to Tong-terra loans with
assistance; and the remaining
low interest rates and to the
three percent (3%) shall be
training and loan fund.
utilized in accordance with the
provision of Section 26 of the Act.
c. Training and Loan Fund
Provided, That the loans to be
This shall serve as capital awarded herein shall be from short-
for the establishment and to-medium-term with low interest
operation of gasoline stations and rates.
shall be administered by the DOE
under a separate account.

An initial amount of Three RULE IV — ANTI-TRUST

hundred million pesos
(P300,000,000.00) shall be provided
by the Philippine Amusement and
Gaming Corporation (PAGCOR). Of
this amount; two percent (2%)
plus any additional funding shall be
allocated for the two-fold program;
one percent (1%) plus any
SAFEGUARDS, OTHER PROHIBITED
A CTS A ND RE M E DI E S
SECTION 15. Anti-Trust Safeguards
To ensure fair competition and
prevent cartels and monopolies in the .

additional funding shall be set Industry, the following acts are hereby
aside for administrative, prohibited:
 a. C art el i zat io nTo ensure compliance with the
an y agr eemen t , c ombin a t ion or provisions of the Act, the refusal to
c on c er t ed a ct ion by r efin ers , comply with any of the following shall
impor t er s a n d/ or dea ler s , or likewise be prohibited:
t h eir representatives, to fix prices,
restrict outputs or divide markets, a.submission of any
either by products or by areas, or reportorial
allocate markets, either by requirements;
products . or by areas, in restraint b.use of clean and safe
of trade or free competition, (environment and
including any contractual worker-benign)
stipulation which prescribes pricing technologies;
levels and profit margins; c.any order or instruction of the
DOE Secretary issued in
b. the exercise of his
means selling or offering to sell enforcement powers under
any oil Section 15 of the Act: and
product at a price below the d.registration of any fuel additive
seller's or offeror's average with the DOE prior to its
variable cost for-the purpose of use as an additive.
destroying competittbn,
eliminating a competitor or Any person, including but not
discouraging a potential competitor limited to the chief operating officer, chief
from entering the market: executive officer of the partnership,
Provided, however, That pricing corporation or any entity involved, who
below average variable cost in is found guilty of any of the said
order to match the lower price of prohibited acts shall. suffer the penalty
the competitor and not for the of imprisonment for two (2) years and fine
purpose of destroying ranging from Two hundred fifty thousand
competition shall not be deemed pesos (P250,000.00) to Five hundred
predatory pricing. For purposes of thousand pesos (P500,000.00). •
this prohibition, "variable cost" as
distinguished from "fixed cost",
refers to SECTION 17. Remedies
page 18
The DOE-DOJ Task Force,
costs such as utilities or raw created under Section 14 (d) of the
materials, which vary as the Act, shall take the following remedial
output increases or decreases and measures:
"average variable cost refers to
the sum of all variable costs a.investigate and act upon
divided by the number of units of complaints Or reports
outputs. from any person of an
unreasonable rise in the
Any person, including but not prices of petroleum
limited to the chief operating officer, products and may, motu
chief executive officer or chief finance proprio, investigate and/or
officer of the partnership, corporation or file the necessary
any entity involved, who is found guilty complaint with the proper
of any of the said prohibited acts shall court or agency; -
suffer the penalty of three (3) to seven
(7) years imprisonment, and a fine b.investigate and act upon
ranging from One million pesos complaints or reports of
(P1,000,000.00) to Two million pesos commission of the
(P2,000,000.00). prohibited acts under
Section 11 of the Act, and
after determination of
SECTION 16. Other Prohibited Acts such violation endorse
the same to the
provincial or city
prosecutor having
jurisdiction for institution
of the appropriate action;
 page 27
page 21

(b)Plot plan (location of various facilities for the

A
storage);
l (c)Maximum design and actual capacities of crude
l and product storage oil movements'
facilities (docking, berthing, and loading).
f
e (iii) Distribution/Operation of Petroleum Carriers (Pipeline,
e Tankers, Barges, Tanktrucks)
s
(a)For tankers and barges: details and particulars of
the vessel;
a
(b)For pipelines: location and description, product
n
service, and capacity/pumping rate;
d
(c)For tank trucks: number of units and
corresponding capacities, and Calibration
c Certificate.
h
a (iv) Gasoline Stations
r
g (a)List of dispensing pumps and underground asks
e with the corresponding capacities and
s products stored; and
(b)Lay-out plan and latest photograph of the outlet.
t
o (v) LPG Refilling Plant

b (a)List of approved-type filling equipment;

e (b)Plant data on storage and other fixed facilities;
(c)Technical data on plant capacity;
(d) List Qualified LPG servicemen and duly
e
licensed personnel; and
n
(e)Lay-out plan and latest photograph of the plant.
c
o
(vi) Bu nk er in g F r om Fr eepor t s an d S pec ial E c on omic
u
Zones - Copy of the delivery receipt signed by both the
n
transporter and end-user vessels' official/master/chief mate,
t
and repr esentatives of the BO C an d Ph ilippine Por ts
e
Authority.
r
e
d
2. Inspection and Audit of Facilities
d The Bureau shall conduct periodic inspection and audit at
u various points of the business, such as but not limited to refineries,
r ma nufac tur in g and storage plant s, handling, mar ketin g, and
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:
.

(i) R
efining
,
Proces
 sing,
includi
ng
Recycli
ng and
Blending

Exact location of the refinery/plant;

Plot plan (location of various equipment and
facilities for the refinery/plant);
Process configuration and description;
Material balance and product yield;
Maximum design. and actual capacities for
crude and product storage, oil movements
facilities (docking, berthing, and loading), as
well as process units capacities.

(ii) S
toring
(transs
hipmen
t)
(a)

Exact location
of the storage
site;
p downstrea
a m oil
industry
(xv) All LPGshall
refiners shall
provide
test-weighthe and
leak test every
Bureau
cylinder before
with
each one leaves
annual
the refilling plant
updates
premises. of
informatio
4. n on , the
. Data on facilities
Facilities
used in
the
y personoperation,
who shallincluding
engage inthe
any capacities
activity or• and
business working/o
in perating
conditions
of suchS
faciliti E
es. -w
Pertine
h
nt
p e r m i t si
for •
any or
• all
new/additiRULE VI -
onalirenovTRANSITION PHASE
ated/refur
bished
facilities .
and their
respective
operation A
shall bep
submitted
to theP
Bureau
prior to
commissioAs prov
ning. ided
Decommisund er
sioning orSec.
19
non- of the
operation
of Act,
facilities, full
der
and theegul
reasons atio n of
for the
Inth
shall beiry
reported
to thes
Bureau
within five
(5)
working RULE VIII - FINAL
days fromPROVISIONS
stoppage
of
operation.A
. T ppin
•-.rt es
eoub
lic_o eD E P A R T M
f the
ENTIARC
Phili
ULAR
DC2003-
11-010 v

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 A. broken or tampered valve or notch seal, pr the absence of one on a
l o a d e d c o m p a r t m e n t , s h a l l gi v e r i s e t o t h e p r e s u m p t i o n t h a t t h e T a n k T r u c k i s
u•DERDEL1VERING or that the product contained is adulterated and the
shipment may be refused by the buyer.
Section 14. CALIBRATION AND TESTING OF D3SPEN5ING PUMPS USING
A PROPERLY SEALED CALIBRATING BUCKET
Owners and/or operators of Retail Outlet's shall maintain in their Retail
Outlets a DOST-ITDI calibrated and sealed calibrating bucket available for use
pursuant to Seaton 12 hereof. The Retail Outlet's calibrating bucket's must be
recalibrated and resealed once every twelve (12) months.
All di spe ns in g pu mp m ete rs of Re ta il Outle ts sh al l b e t est ed da ily not la te r
than 9:00 A.M. for accuracy in delivering Liquid Petroleum Products using said
calibrating bucket.
Any dispensing pump not delivering the correct quantity shall be marked by
the o wner and /or op erator with an "out- of-orde r" sign and pa dlocked and sha ll
not be used until said pump is recalibrated and resealed by the proper authority.
The calibrating bucket and a written record or logbook of the daily testing
thereof shall be maintained at-all limes in Me Retail Outlet premises, and
presented to OIMB inspectors and to the public upon demand thereof.
Fai lure to prov ide the written re cord or l o g b o ok a n d t h e p r o p e r l y s e a l e d
calibrating bucket shall give rise CO the presumption that the dispensing pump is
UNDERDELIVERING.
Section 15. SAMPLE TAKING AND TESTING OF DISPENSING PUMPS
Duly authorized inspectors from the OIMB shall undertake random and
una nno unced i n s p e c t i o n s in the p re se nce of the owne r and / or ope ra tor of t h e
Retail Outlet or his designated shift supervisor to test tor, among others, the
sample taking and calibration of dispensing pumps. Owners and/or operators of
th e Re ta il O ut le ts, o r t he ir shift supervisors in their ab se nce, shall al lo w sa id
inspectors to inspect their Retail Outlets and cooperate with them fully.
Retail Outlets shall provide only authorized OIMB inspectors samples of
Liquid Petroleum Products which they are offering for sale, in volumes required by
current DOE issuances and circulars on sample taking and as reflected in the
Special Assignment covering the - said inspection for product testing on-site or,
quality test at the DOE laboratory.
Re ta il Outlets shall retain a dup lica te se t of the samples obtained by the
011-1E inspectors during their inspection and product quality verification. as
prov ided m Me mo ra nd um C ir cu la r N o. 20 0 1- 02 - 01 1. Re fusa l to allow entry of the
Section 23. INITIATION OF CRIMINAL ACTS
authorized ❑IM8 Inspectors to the Retail Outlet and/or to conduct the inspection
and sampling shall constitute prima fade evidence of ILLEGAL TRADING.
Section 16. UNDERDELIVERY IN DISPENSING PUMPS
The quantity of Liquid Petroleum Products delivered by dispensing pumps
a t Re ta il O u t l e t s a s me a sure d by the d i sp e nsi ng p um p m e te r sha l l no t b e l e ss
than the actual quantity by more than fifty (S0) milliliters for every ten (10) liters
as measured by a calibrating bucket certified and sealed by the DOS/ - 17D1.
The calibrating bucket shall -be filled to the ten (10)-liter mark three (3)
times at low, medium and fast flow rates and the average quantity as measured
by the pump meter shall constitute the quantity to be compared with the actual
quantity of ten (10) liters. Dispensing pumps delivering less than the tolerable
minimum quantity shall be deemed to be UNDERDELIVERING. The absence of an
"out-of- order" sigh or padlock locking the dispensing pump shall be deemed an
actual use of the pump fo r the conduct o f Re ta il ing. A di sp ensi ng pum p fo und
with a broken or no seal shall constitute a prima fade evidence of
UNDERDELIVERING.
RULE IV
PETROLEUM PRODUCT STANDARDS
Section 17, PRODUCT QUALITY
Only Liquid Petroleum Products complying with the Philippine National
Standards (MS), including the prescribed color coding scheme for the same shall
be dispensed at Retell Outlets.
The possession of Liquid Petroleum Products which do not meet the
prescribed 1 3 115 shall constitute prima facie evidence of ADULTERATION and the
-
sale, distribution, transportation, exchange or bailer of adulterated products shall
-constitute ILLEGAL TRADING.
Section 18. TESTING AND RETENTION OF SAMPLES OF PETROLEU M
PRODUCTS BY DEALER/ OPERATOR
1n order. to protect against the delivery of adulterated product, Retail
Outlets ma' do either of the following:
a. T he ow ne r and/ or ope ra to r sha ll take o ne ( 1) li te r samp le s of ea ch
Liquid Petroleum Product delivered to his Retail Outlets. The samples
shall be placed in an OIMB-specified container• and sealed in the
presence of the "Tank Truck driver who shall verify the taking of the
sa m p l e b y s i g hi ng o n t h e i n v o i c e _ T h e sa m p l e s ha l l b e k e p t b y t he
owner and/or operator for at least one CO month or until the third
delivery thereafter, whichever is shorter.
- Id.
 Th e in iti ati on o r an ad min is tr at iv e a c t i o n a nd /o r th e impo si ti on o f an y tin e ag ai ns t ( i) Rul e 1 Se cti o n 2 - D e f i n i t i o n o f T e r m s
an y Pe rs on wh o vi ol at e= o r do es n ot co mp ly wan t hi s De pa rt me nt Ci rc ul ar sh al l b e w ith ou t
pr e j u di c e to t he r il in g c an y c rim in al a cti on ag ai ns t su ch p er so n p u r s u a n t . t o B a t a s (ii) Rule II - Illegal Trading
Pambansa Big. 33, as amended. Section 1 - BEU Licensing
Section 2 - Issuance of Receipts
S e c t i o n 5 - Un l o a d i n g o f P e t r o l e u m P r o d u c t s
RULE VII Section 6 - Calibration & Sealing of Dispensing. Pumps Section
FINAL PROVISIONS 7 - Calibration, Registration & Sealing of Petroleum
Product Transport Containers
Section - )4, TRANSITION PERIOD
Rule 111- Petroleum Product Adulteration
All existing Retail Outlets that have fully complied with the prior notice Se ct io n 2 - Sam pl in g & T es ti ng of Fi ni shed Petro le um
r e q u i r e m e n t s o f the DO E pursua nt t o D e p a r t m e n t C i r c u l a r N o . 98 - 03 - 1001 s h a l l b e given Products by Oil Companies
six (6) months from effectivity these the Retail Rules to fully comply with the p r o v i s i o n s S e c t i o n 3 - T e s ti n g o r R e t e n t i o n o f S a mp l e o f P e t r o l e u m
h e r e o f ; • P r o v i d e d , t h a t n e w R e t a i l O u t l e t s u n d e r c o n s t r u c t i o n s h a l l i mm e d i a t e l y c o m p l y P rod ucts b y t he De al er /O pe ra to r
w i t h t h e s am e . Section Sample taking by the Bureau
Section 5 - Removal of Water phase in Underground Tank b y
Section REP EALING.CLAUSE D e a l e r / O p e r a t o r o f P e t r o l e u m P r o d u c t Retail
Outlet
The following DOE issuances and circulars are hereby repealed or amended
accordingly, upon the effectivity of Retail Rules: (iv) Rule 1-V Under delivery & Under filling
Section 1a. – Under delivery in Dispensing Pumps
Se ctio n 10. - D ai ly Te st in g o f Di sp en si ng P ump s by D ea le r
n. Department Circular 9E-u. -.CIO Rules and Regulations
Se ctio n 1c. - Calibration of Dispensing Pumps by Oil Companies
im p l e m e n t i n g R e p u b l i c Ho . 8‘175, 'Downstream Oil Industry
Section Id. - Testing of dispensing Pumps by Bureau
Deregulation Act of 1998 -
personnel and/or by other Law Enforcement agents

Section 5 - N o t i c e P r i o r t o E n g a g e m e n t in a n y Ac ti v i ty or (v), Rule - Hoarding

Business in the Downstream Oil Industry.
Section 2E. SEPARABILITY CLAUSE
Section Reportorial Requirements
Section 7 (a) - Pri o r C O Operation in the Proposed Business or Should any provision herein be declared invalid or unconstitutional by a court of
competent jurisdiction, the same shall not affect the validity of the other provisions not so
declared.
Oh) Section 16 - Other Prohibited Acts
16.b - Subm ission of A ny Rep ortorial Re quireme nts
Section 27. EFFECTIVITY

(iv) Section Display Boards

This Department Circular shall take effect fifteen (15) days from the date of Its
S e c t i o n 18.0.2 - Sampling and Testing of Product S e c t i o n
complete publication in two [2) newspapers of general circulation.
18.b.3 - Calibration
S e c t i o n th.c.2 – inspection & audit of Facilities Fort Bonifacio, Taguig, Metro Manila 1,1124z.,L..4z,L.-..-1- 2003.
Section 18.c.3 - Safety
Section 18.c 1 Conformance to Standards & Facilities,
Stations ,,)

VINCENT 5. PEREZ, 3k,

Pules & Regulations implementing BE 33 as amended by PD 1865 Secretary
t.•
-14-
 Republic of the 'Philippines
DEPARTMENT' OF ENERGY

DEPARTMENT CIRCULAR - NO. ,DC.2011 – 02 – 0001

MANDATORY USE OF BIOPUEL BLEND

WHEREAS, Section 5...2 of Republic Act No. 9367 or the "Biofuel's Act of 2006"
provides:

"Within four years from the effectivity of this Act, the NBB created under
this Act i s e m p o w e r e d t o d e t e r m i n e t h e f e a s i b i l i t y a n d t h e r e a f t e r
recommend to DOE to mandate a minimum of ten percent (1 0%) blend of
bioethanol by volume into all gasoline fuel distributed and sold by each and
every oil company in the country."

WHEREAS, the Department of Energy (DOE) recognizes and adheres to the policy,
objectives and mandate of the Biofuels Act of2006.;

WHEREAS, after extensive public consultation with all stakeholders in 2009-2011,

including scientific tests and studies conducted by technical -experts, the National
Biofuels Board (NBB) -established the viability of implementing the general mandate of
ten percent (10%) for 'bioethanol sold and distributed •by every oil company under
specific terms and conditions;

WHEREAS, in a resolution dated February 3, 201, the NBB recommended to the DOE 'the
implementation of the general Mandate of ten percent (10%) blend of bioethanol for
gasoline fuel under specific ,terms and conditions and the conduct of further public
consultation to determine the feasibility of increasing the current two percent (2%) blend
for biodiesel;

NOW, THEREFORE, in consideration of all the foregoing, the DOE hereby issues,
adopts and promulgates the following mandatory use of biofuel blend:

Section 1 Scope and Application. This Circular shall apply to all participants in the
downstream oil industry and the-local biofuel producers.

Section 2.
Adherence to Declared State Policy By this Circular, the DOE strictly
adheres to the importance and significance of the objective of the Biofuels
Act of 2006 to mandate the use of biofuels /13 a measure to, among others,
develop and utilize indigenous renewable and sustainably-sourced clean
energy sources to reduce dependence on imported oil, mitigate toxic and
greenhouse gas emissions, increase rural employment and income and
ensure availability of alternative and renewable clean energy without any

Energy Center, Merritt Rd., Fort Bonitacio, iaguig City, Metro Manila, Philippines
Fax #817-61-94 Tell 840-20-08 Fax # 840-21-38 Tel # 1340-22-36 Fax # 84017-31 Tel # 817-86-03 Trunkline 479-29.00
Website: www.doe.nov.ph, E-mail: inlo(cbdoe.aov.ph
Section 4. Biodiesel Blend.

4.1 Full Compliance. Upon the determination by the NBB. the mandate
under the Biofuels Act of 2006 far - the mandated two percent (2%) blend of biodiesel by
volume pursuant to the PNS has been sufficiently achieved and complied with.

4.9 P u b l i c C o n s u l t a t i o n s . Consistent with the recommendation of the NBB

and considering the supply local biodiesel production in excess of local requirements, the
DOE, together with the NBB, shall conduct further public consultations ire .2011, to
determine the feasibility of further _increasing the current biodiesel blend.
Section 5. Effectivity and Publication. This Circular shall he effective immediately
upon its publication in two (2) newspapers of genera] circulation and shall
remain in effect .-until revoked.

Fort Bonifacio, Taguig City, Metro Manila. February 6_ 2011.

JOS :RENE 'D. ALMENDRAS

Secretiry wraiotriegur
REPLYIWO [ME:

11111.