AGRARIAN LAW Topic:

AND SOCIAL
LEGISLATION

Title: GR No. 159149

PEREZ V LPG REFILLERS ASSOCIATION OF THE Date: June 26 2006
PHILIPPINES, INC.
Ponente: Quisimbing, J.
Long title:
Third Division
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.

FACTS

Batas Pambansa Blg. 33 was enacted to penalize illegal trading, hoarding, overpricing, adulteration,
under delivery, and underfilling of petroleum products, as well as possession for trade of adulterated
petroleum products and of underfilled liquefied petroleum gas (LPG) cylinders. The law sets a minimum
of P20,000 and a maximum of P50,000 as penalties. The Department of Energy issued Circular No.
2000-06-010 to implement the law.

Respondent LPG Refillers Association of the Philippines asked the DOE to set aside the Circular for
being contrary to law but to no avail, hence they filed an action before the RTC to nullify the circular.

RTC granted the petition and nullified the Circular on the ground that it introduced new offenses not
included in the statute. Moreover, in providing penalties on a per cylinder basis for each violation, there
is a possibility that the P50,000 maximum penalty might be exceeded.

The Circular has a range of P1,000-5,000/cylinder for first offenses and a range of P5,000-
10,000/cylinder for third offenses. For retails outlets, the max penalty is P20,000. Aside from the
monetary fines, some offenses also include the recommendation the closure of the business to the
proper LGU.

Meanwhile, petitioner Sec. Perez of the DOE argues that DOE is empowered by the following provisions
to penalize the acts it enumerated in the circular:

1. BP Blg. 33, as amended:

“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.
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“The administrative sanction that may be imposed shall be without prejudice to the filing of a criminal
action as the case may warrant.”

2. Sec 23 of RA 8479 (Downstream Oil Industry Deregulation Act of 1998):

“Section 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.”

3. Sec 5(g) and Sec 21 of RA 7638 (Department of Energy Act of 1992):

“(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;
xxx
Subject to existing rules and regulations, the funds and monies collected or which the 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”

ISSUE/S

Whether or not the Circular No. 2000-06-010 is valid/legal.

Held:

YES. For an administrative regulation, to have the force of penal law, the following must concur:

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

As for the first requirement:

1. B.P Blg. 33 only states 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.

2. The acts and omissions stated in the circular are well within the modes contemplated by the law
and serve the purpose of curbing pernicious practices of LPG dealers.

As for the second requirement:

1. The statute provides a minimum and maximum amount as penalties.

2. The maximum pecuniary penalty for retail outlets is P20,000, an amount within the range
allowed by law. While the circular is silent as to the max penalty for refillers, marketers, and
dealers, such does not amount to violation of the statutory maximum limit.

3. 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.

The law was intended to provide the DOE with increased administrative and penal measures with which
to effectively curtail rampant adulteration and short selling, as well as other acts involving petroleum
products, which are inimical to public interest.

Carpio, Carpio Morales and Velasco Jr., concurring