Perez v. LPG Refillers PDF

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 underfilling of petroleum products,
as well as possession for trade of adulterated petroleum products and of
underfilled liquefied 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
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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
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
C. LPG Retail
Outlet
SECTION 7. NO APPROPRIATE OR AUTHORIZED LPG SEAL
B. Dealer
C. LPG Retail
Outlet
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
C. LPG Retail
Outlet
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
C. LPG Retail
Outlet
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 Refillers 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 filed 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 nullified 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
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

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
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

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 10 of B.P. Blg.
33 and Section 23 11 of Republic Act No. 8479. 12 Petitioner adds that Sections
5(g) 13 and 21 14 of Republic Act No. 7638 15 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. 16
The Circular satisfies the first requirement. B.P. Blg. 33, as amended,
criminalizes illegal trading, adulteration, underfilling, 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, underfilling LPG cylinders, tampering LPG cylinders, and unauthorized
decanting of LPG cylinders. These specific 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 find 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, 17 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 defines 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 refillers, marketers, and dealers. Nothing in the Circular contravenes the
law.
Noteworthy, the enabling laws on which the Circular is based were
specifically 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.

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THIRD DIVISION

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

The HONORABLE SECRETARY VINCENT S. PEREZ, in his

The facts are undisputed.

On June 9, 2000, Circular No. 2000-06-010 was issued by the DOE to

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

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

Respondent then ﬁled a petition for prohibition and annulment with

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING

For an administrative regulation, such as the Circular in this case, to have

Clearly, it is B.P. Blg. 33, as amended, which deﬁnes what constitute

(b) Adulteration of finished petroleum products, or possession of

xxx xxx xxx

"SEC. 3-A. Rules and Regulations; Administrative sanctions for violation

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

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