AN ACT DECLARING A NATIONAL POLICY ON THE PETROLEUM INDUSTRY, REGULATING THE ACTIVITIES AND RELATIONS OF PERSONS AND ENTITIES ENGAGED THEREIN, ESTABLISHING AN OIL INDUSTRY COMMISSION TO EFFECTUATE THE SAME, AND DEFINING ITS FUNCTIONS, POWERS AND OBJECTIVES, AND FOR OTHER PURPOSES.

[ REPUBLIC ACT NO. 6173, April 30, 1971 ]

AN ACT DECLARING A NATIONAL POLICY ON THE PETROLEUM INDUSTRY, REGULATING THE ACTIVITIES AND RELATIONS OF PERSONS AND ENTITIES ENGAGED THEREIN, ESTABLISHING AN OIL INDUSTRY COMMISSION TO EFFECTUATE THE SAME, AND DEFINING ITS FUNCTIONS, POWERS AND OBJECTIVES, AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Title.—This Act shall be known as the Oil Industry Commission Act.

Section 2. Declaration of Policy and Purposes.— Petroleum and its products being vital to national security, and their continued supply at reasonable prices being essential to the general welfare, it is hereby declared to be the policy of the State that the act and business of importing, exporting, re-exporting, shipping, transporting, processing, refining, storing, distributing, marketing, and selling crude oil, gasoline, kerosene, gas and other refined petroleum products as well as the operations and activities of natural and juridical persons, firms and entities engaged in the petroleum industry shall be carried out in a manner consistent with the public interest, so as to attain the following objectives and purposes:

Section 3. Oil Industry Commission.— To implement the national policy and attain the objectives and purposes of this Act, an independent Commission is hereby created, which shall be known as the Oil Industry Commission, and shall be organized within sixty days after the approval of this Act. The Commission shall be composed of a Chairman and four Associate Commissioners. The Chairman and the Associate Commissioners shall be natural-born citizens and residents of the Philippines. In addition, the Chairman shall possess all the qualifications of a Justice of the Supreme Court and the Associate Commissioners shall be at least thirty-five years old, of good moral character and of recognized competence in the field of economics, finance, banking, commerce, industry, agriculture, engineering, management, law or labor. They shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments. No person who has worked within three years immediately prior to his appointment or is working in any firm engaged in the petroleum industry or any other entity whose main business is directly related to any such firm shall be appointed to the Commission.

The term of office of the Chairman and the Associate Commissioners shall be four years, but the first Chairman appointed shall hold office for four years and of the first four Commissioners two shall hold office for a term of two years, and two for a term of three years. No person may be appointed to serve more than two successive terms.

The Chairman and Associate Commissioners shall, upon assumption of office and within the month of January of every other year thereafter, as well as upon the expiration of their respective terms of office, or upon their resignation or separation from office, prepare and file with the offices of the President, the President of the Senate and the Speaker of the House of Representatives a true, accurate, complete, detailed and sworn statement of assets and liabilities, including a statement of amounts and sources of income, amounts of personal and family expenses, and amounts of income taxes paid for the next preceding calendar year: Provided, That the first statement may be filed within the month of January next following if the Chairman or Associate Commissioner concerned assumes office less than two months before the end of the calendar year.

Three members of the Commission shall constitute a quorum and the vote of three members shall be necessary for the adoption of any rule, ruling, order, resolution decision or other act of the Commission. The Commission shall hold office in the City of Manila, or at such other place as the President of the Philippines may designate.

Section 4. Compensation of Commissioners.—The Chairman of the Oil Industry Commission shall receive a compensation of Fifty thousand pesos annually and a monthly commutable allowance of one thousand pesos, while the Associate Commissioners shall each receive an annual compensation of Forty thousand pesos and a monthly commutable allowance of six hundred pesos. The Chairman and Associate Commissioners shall devote their full time to the Commission and shall not accept other employment.

Section 5. Staff.—The Commission shall appoint and maintain an adequate staff, which shall include a Secretary of the Commission. The Secretary shall be a member of the Philippine Bar with at least five years experience in the active practice of law in the Philippines or in the discharge of an office requiring as an indispensable requisite admission to the practice of law in the Philippines. The members of the technical staff, except for those performing purely clerical functions, shall possess at least a bachelor's degree in the line of specialization required by their respective positions: Provided, That except as to positions which are policy-determining, highly technical or primarily confidential, all positions in the Commission are subject to the provisions of the Civil Service Law and Rules, but are exempt from the regulations of the Wage and Position Classification Office.

Section 6. Functions of the Commission.— The Commission shall have supervision and jurisdiction over all persons, corporations, firms or entities engaged in the business of importing, exporting, re-exporting, shipping, transporting, processing or refining of indigenous and imported crude oil or other petroleum products, storing, marketing, distributing, or selling, both at wholesale and retail, gasoline, gas, oil, kerosene, and other crude or refined petroleum products, and shall regulate and supervise the operations and activities of said persons and entities including the following:

Section 7. Powers of the Commission Upon Notice and Hearing.—The Commission shall have power, upon proper notice and hearing, in accordance with the provisions of this Act:

Section 8. Powers of the Commission Without Hearing. — The Commission shall have the power to do the following without hearing:

Section 9. Other Duties of the Commission.— The Commission shall 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 members of Congress and 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. The Commission shall likewise 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 of the Commission shall include, among others, the following data on a company by company basis:

Section 10. Commission Procedure.— All inquiries, studies, hearings, investigations and proceedings conducted by the Commission shall be governed by rules adopted by the Commission, and in the conduct thereof the Commission shall not be bound by the technical rules of evidence: Provided, That the Commission may summarily punish for contempt by a fine not exceeding five hundred pesos or by imprisonment not exceeding thirty days or both, any person guilty of such misconduct in the presence of the Commission or so near thereto as to seriously interrupt any hearing or session or any proceedings before it, including cases in which a person wilfully fails or refuses, without just cause, to comply with a summons, subpoena or subpoena duces tecum legally issued by the Commission or, being present at a hearing, session or investigation, refuses to be sworn as a witness or to answer questions when lawfully required to do so, or to furnish information required by the Commission under this Act. The sheriff and other police agencies of the place where the hearing or investigation is conducted shall, upon the request of the Commission, assist it to enforce the provision of this Section.

Section 11. Review of Commission's Order.— A party adversely affected by any order of the Commission in the exercise of its powers subject to hearing may, within a period of thirty days from receipt of said order or fifteen days following denial of a motion for reconsideration filed within the period to appeal, petition the Supreme Court, by certiorari as a mode of appeal, to review and reverse, modify or amend the same, without prejudice to invoking other special civil remedies allowed under the Rules of Court. The order, ruling or decision shall become executory fifteen days after the expiration of the period to appeal. Unless the Supreme Court directs otherwise, appeal shall not stay the execution of the ruling, order or decision.

The Supreme Court shall prescribe the procedure to be followed for such appeals, but until it provides otherwise the procedure governing appeals from the Public Service Commission shall be followed.

Section 12. Petroleum Dealers' or Distributors' Association.— For the purpose of this Act, a petroleum dealers' or distributors' association is an organization or association of petroleum dealers or distributors dealing in petroleum products duly registered with the Securities and Exchange Commission.

Section 13. Requirements to Petroleum Dealers' and Distributors' Association.— Every petroleum dealers' or distributors' association duly registered with the Securities and Exchange Commission, shall keep books and records containing a list of its members in alphabetical order and the minutes of its meetings, a list of its officers, and in general shall comply with all the rules and regulations of the Securities and Exchange Commission.

Section 14. Appropriations.— The sum of one million five hundred thousand pesos or so much thereof as may be necessary for the proper implementation of this Act for the fiscal years nineteen hundred severity-one and nineteen hundred seventy-two is hereby appropriated out of any funds in the National Treasury not otherwise appropriated. Thereafter, the operational expenses of the Commission shall be drawn from fees and charges collected under the authority of Section fifteen of this Act. Any unobligated balances at the end of each fiscal year, starting with fiscal year nineteen hundred seventy-three, shall accrue to the general funds.

Section 15. Additional Fee on Importations and Turn over of collections; Release to the Commission is Ministerial.— Effective July one, nineteen hundred seventy-one, there shall be levied, assessed and collected, an additional fee of one-tenth of one per cent of the CIF value of crude oil and petroleum products imported into the Philippines. The fee imposed herein shall be collected at the same time, in the same manner and subject to the same penalties as the duties and taxes regularly imposed on such products. This fee shall not be a basis for any increase in the price of any petroleum product as of the date of the approval of this Act.

The Commissioner of Customs shall turn over the collections to the Treasurer of the Philippines monthly within the first ten days of the succeeding month. No portion of the collections may be transferred or diverted to the general or any other fund or used or expended for any purpose other than for the budgetary requirements of the Oil Industry Commission, the provision of any law to the contrary notwithstanding. It shall be the ministerial duty of the Commissioner of the Budget and the Treasurer of the Philippines, as well as the officers and employees under their supervision and control, to effect releases of said collections to the Commission upon order or authorization of the Chairman thereof.

Section 16. Penalties.—

Section 17. Separability of Any Provision.— If any provision of this Act shall be held invalid, the remainder of this Act shall not be affected thereby.

Section 18. Repealing Clause.— The provisions of Republic Act Numbered Sixty-one hundred and twenty-four, otherwise known as the Price Control Law, referring to petroleum products, and all Acts or parts of Acts inconsistent with this Act are hereby repealed but the repeal shall not affect judicial actions, prosecutions or proceedings begun while the same were in force.

Section 19. Effective Date.— This Act shall take effect upon its approval.

Approved, April 30, 1971.

1. Whether claimed increases or decreases in costs, sales or profits are real or simulated;

2. 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 increases therein may be offset by increased efficiency and reduction of excessive or unnecessary expenses;

3. 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

4. The cost profit levels of the industry.