Court issues TRO vs DOE’s oil unbundling

MANILA, Philippines — Petron Corp. has secured a preliminary injunction, enjoining the Department of Energy (DOE) from implementing its oil unbundling policy.

In an eight-page order,  Mandaluyong Regional Trial Court (RTC) Branch 213 granted Petron’s application for a writ of preliminary injunction against DOE Circular 2019-05-0008 or the “Revised Guidelines for the Monitoring of Prices on the Sale of Petroleum Products by the Downstream Oil Industry in the Philippines.”

The court earlier issued a 20-day temporary restraining order (TRO) on Petron’s petition filed last June 25.

The Mandaluyong RTC found “clear and unmistakable right” to stop the DOE from implementing the said policy while the court “hears the main petition for declaratory relief so as not to render the judgment ineffectual.”

“To reiterate, if the implementation of the assailed circular is not restrained in the meantime, the petitioner might not be able to comply with its requirements, the first of which is the submission of the weekly reports,” the court said.

“At the same time, the petitioner might be placed at risk of losing its trade secrets and in irreparable injury by disclosing such information to respondent DOE. The petitioner and its officers may be subjected to criminal prosecution and the administrative penalties mentioned in the circular for noncompliance with the same,” it said.

The fuel unbundling policy—which was originally set for June 28 implementation—was supposed to take effect on July 13 after the agency re-published the circular together with its annex.

The policy, signed by DOE Secretary Alfonso Cusi in May, requires all oil companies to report their “unbundled price adjustments,” including import costs, tax burdens, biofuel costs, oil company take components, and other essential cost components that contribute to the changes in retail prices.

However, oil companies argued that under the  Downstream Oil Industry Deregulation Act of 1998, the DOE was only authorized to monitor both the international and domestic price movements of petroleum products, as well as the compliance of businesses with national standards.

Last July 12, the Taguig RTC acted on the petition filed by Pilipinas Shell Petroleum Corp. (PSPC) and issued a 20-day TRO against the DOE.

While the DOE’s mandate is to monitor oil price movements, PSPC said this policy runs against Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 and “leads the industry back to the path of regulation.”

Since the Downstream Oil Industry Deregulation Act was passed, government does not interfere with the pricing, exportation, and importation of oil products.

It also requires the DOE to promote fair trade practices in the liquid fuel retailing business, including quality and quantity of petroleum products, and ensuring safety from fire, danger, health and environmental risks, among others.

The DOE, for its part, had sought the opinion of the Office of the Solicitor General.