Presidential Decree No.1206. Creating the Department of Energy

(a) Whether claimed increases or decreases in costs, sales or profits are real or simulated;

(b) 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 increase therein may be offset by increased efficiency and reduction of excessive or unnecessary expenses;

(c) 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

(d) The cost and profit levels of the industry. (3) Regulate the capacities of new refineries or additional capacities of existing refineries so as to accomplish the purposes and objectives of Republic Act No. 6173, as amended; (4) License refineries that may be organized after the enactment of this Decree, under such terms and conditions as are consistent with the national interest; (5) Review the cost at which crude oil had been imported into the Philippines within the preceding year whether by private entities or by the government, whenever the Board has received a formal complaint or has been or is being imported into the Philippines are unreasonable or out of line with trends in the international market, taking into consideration among other factors, the quality and security of supply, availability and location of crude oil, and freight rates prevailing at the time; and, if found to be unreasonable or out of line, require the importer or importers concerned to reimburse the excess of the foreign exchange involved to the Central Bank of the Philippines and fix the maximum import cost, requiring that, before future importation be made at a cost in excess thereof, the approval of the Board be first secured. Any order of the Board in the exercise of this power shall be binding on the Central Bank of the Philippines, the Bureau of Customs and all other executive agencies of the government; (6) Take appropriate measures whenever an authorized increase in the prices of petroleum products would result in an extraordinary gain from existing inventories, including the payment by persons or companies benefited to the Special Fund created under Section 8(j) of Republic Act No. 6173, as amended, of such amounts as the Board may determine in an appropriate order, as would assure that said extraordinary gain will redound to the public interest; and (7) Require through an appropriate order, payment by persons or companies engaged in the business of importing, manufacturing and/or marketing petroleum products, to the Special Fund created under Section 8(j) of Republic Act No. 6173, as amended of amounts not exceeding fifteen centavos per liter of refined petroleum products. In the exercise of this power, the Board shall take into account the requirements of the Special Fund in relation to the purposes for which it was created, the effect of the payment on prices of petroleum products and, corollarily its cost impact on the economy and/or the consuming public and the cost and profit levels of the industry. iv. Except as otherwise specifically provided, the following powers and functions of the abolished Oil Industry Commission under Republic act No. 6173, as amended, are transferred either to the Bureau of Energy Utilization or the Board of Energy, or both, to the extent applicable and appropriate in the light of the foregoing transfers of powers and functions: (1) Set conditions which would accomplish the purposes of Republic Act No. 6173, as amended, under which persons, natural or juridical, can engage or continue engaging in the business of importing, exporting, re-exporting, shipping, transporting, processing, refining, storing, distributing, marketing or selling crude oil, gasoline, kerosene, gas, and other refined petroleum products or by-products; (2) Require importers of crude oil and petroleum products to file data on their import and shipping costs as well as other material information relative thereto; (3) Require all persons, corporations and other entities engaged in the petroleum industry and their associations or institutes, to furnish it with such relevant information as it may need in the discharge of its duties; (4) Require all dealership agreements to be filed and registered as public documents; (5) Issue subpoena and subpoena duces tecum in any inquiry, study, hearing, investigation, or proceedings which it may decide to undertake in the exercise of its powers and functions; (6) Promulgate rules and regulations relevant to procedures governing hearings before it and enforce compliance with any rule, regulation, order, or other requirement: Provided, That said rules and regulations shall take effect fifteen days after publication in the Official Gazette; (7) Perform such other acts as may be necessary or conducive to the exercise of its powers and functions; and (8) 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 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; and 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 shall include, among others, the following data on a company-by-company basis: (a) Volume, weight, type, import price, and supplier of crude oil and petroleum products imported; (b) Tonnage, type, nationality and ownership of vessels used in importing crude oil and petroleum products, as well as shipping costs; (c) Audited financial statements of petroleum refineries and marketing companies; (d) Data on exported products, price of same, country of destination, and vessel used;

(e) Listed wholesale price of gasoline on a monthly basis;

(f) Posted and market prices of crude oil at sources of importation and other known sources of crude oil supply; and

(g) Cost of refining petroleum products. v. The provision of Section 16 of Republic Act No. 6173, as amended, shall continue to be effective. c. The powers and functions of the Philippine National Oil Company relating to the regulation of other oil companies, including the importation of refined petroleum products, are hereby transferred to the Department or its bureaus as appropriate. SEC. 13. Concurrent Authority Over the Regulation of the Mining of Radioactive Minerals. – The powers and functions of the Bureau of Mines relative to the mining location, registration, exploration, development and exploitation of radioactive minerals containing uranium, thorium and other radioactive elements under Presidential Decree No. 1101, shall be subject to the concurrent clearance of the Bureau of Energy Development which may prescribe such additional terms and conditions as are necessary insofar as these pertains to energy development. SEC. 14. Representation in the National Water Resources Council. – The Department shall be represented in the National Water Resources Council by the Secretary of Energy or his designated representative as an additional member thereof. SEC. 15. Representation in the NEDA. - The Secretary of Energy shall be an additional member of the NEDA Board. SEC. 16. Representation in the National Science Development Board. – The Secretary of Energy and the Secretary of Industry shall be additional members of the National Science Development Board. SEC. 17. Representation in the National Electrification Administration. – The Secretary of Energy shall be an additional member of the Board of National Electrification Administration. SEC. 18. Representation in the Maritime Industry Authority. – The Secretary of energy shall be an additional member of the Board of the Maritime Industry Authority. SEC. 19. Benefits of Personnel Who May be Laid Off. – Personnel of agencies abolished or otherwise affected by this reorganization who are laid off as a result of the implementation of this Decree shall be entitled to benefits and privileges provided for under Section 5 and 6 of Republic Act No. 5435, as amended. SEC. 20. Appropriation. – To carry out the purposes of this Decree, there is hereby appropriated out of any funds in the National Treasury not otherwise appropriated, the sum of ten million pesos (P10,000,000.00) for the operation of the Department and its bureaus, including such amount thereof as may be needed to augment the appropriations of the Board of energy, for the remaining period of FY 1977 in addition to whatever applicable appropriation that may be transferred to it from among the government agencies reorganized under this Decree. Thereafter, the appropriation for the Department, its bureaus and the Board of Energy shall be included in the Annual General Appropriation Act. SEC. 21. Applicability Clause. – The applicable provisions of Republic Act No. 6173, as amended, otherwise known as the “Oil Industry Commission Act”; Presidential Decree No. 269, otherwise known as the “National Electrification Administration Decree”; Presidential Decree No. 87, also known as the “Oil Exploration and Development Act of 1972”; Presidential Decree No. 910, creating the Energy Development Board; Presidential Decree No. 948, strengthening and reconstituting the Power Development Council; Presidential Decree No. 972, otherwise known as the “Coal Development Act of 1976”; Presidential Decree No. 1068, directing the acceleration of research, development and utilization of non-conventional energy resources; Presidential Decree No. 1101, declaring the areas containing radioactive minerals open to mining location and disposition and such other laws and decrees governing the administration and development of energy resources shall continue to have full force and effect, except insofar as inconsistent with this Decree. SEC. 22. Separability Clause. – Should any provision of this decree be held unconstitutional, no other provisions hereof shall be affected thereby. SEC. 23. Repeating Clause. – All laws, decrees, executive orders, administrative orders, rules and regulations inconsistent herewith are hereby repealed, amended or modified accordingly. SEC. 24. Effectivity. – This Decree shall take effect immediately. Done in the City of Manila, this 6th day of October, in the year of Our Lord, nineteen hundred and seventy-seven. (Sgd.) FERDINAND E. MARCOS President of the Philippines By the President: (Sgd.) JACOBO C. CLAVE Presidential Executive Assistant