MANILA – The Department of Energy (DOE) urged senators to grant the agency stronger legal authority to address oil hoarding as the Senate reviewed the country’s downstream oil deregulation law amid concerns over fuel price volatility and supply risks.

During a hearing of the Senate Committee on Energy, chaired by Senator Erwin Tulfo, Energy Secretary Sharon Garin acknowledged that the DOE has limited powers to immediately act against companies suspected of hoarding petroleum products.

Garin said the agency’s authority under the current Oil Deregulation Law does not clearly cover issues involving pricing, inventory levels, stocking and enforcement.

“Yes, sir. That’s the problem in that order. So that’s why when we issued show cause order, we had to use other laws, Mr. Chair. It’s not based on oil deregulation. We had to go through PNP (Philippine National Police), DTI (Department of Trade and Industry), DOJ (Department of Justuce), all the other anti-hoarding laws that we used,” Garin said.

Tulfo said the legal gap limits the government’s ability to protect consumers if fuel supplies are deliberately withheld to influence market conditions.

“Because our countrymen don’t know that clearly, if a group or a company hoards oil to control it, we have nothing to do. We still need to go to court. I mean, we do not have the authority. What kind of law is this?” Tulfo said.

DOE Undersecretary Riolita Inocencio said the agency is proposing amendments that would define oil hoarding by both petroleum traders and consumers and impose corresponding penalties.

Under the proposal, petroleum traders may be deemed to have engaged in hoarding through acts such as intentionally withholding fuel products, unjustifiably closing bulk storage facilities, posting out-of-stock notices despite available supplies, shutting down retail outlets or dispensing pumps despite having stocks, or causing unreasonable delays in scheduled deliveries.

Consumers, meanwhile, may be considered to be hoarding if they make bulk fuel purchases beyond normal consumption without valid operational reasons, repeatedly buy large quantities within a short period, or accumulate petroleum products through multiple transactions that indicate stockpiling.

The DOE proposal would impose fines ranging from PHP250,000 to PHP500,000 or imprisonment of six months to two years for petroleum traders found guilty of hoarding. Consumers could face fines of PHP10,000 to PHP100,000 and imprisonment of up to six months.

Inocencio said stiffer penalties would apply if the offense is committed during a state of energy emergency.

The proposed amendments would also authorize the DOE to require oil companies to submit unbundled petroleum price reports and other special reports, and allow the department to deny, suspend or revoke certificates, clearances and permits, including issuing preventive suspension orders while administrative cases are pending.

Garin said Republic Act No. 8479, or the Downstream Oil Industry Deregulation Act of 1998, achieved its objective of liberalizing the oil industry but may now need to be revisited.

“I think during its time in 1998, that’s what was needed to liberalize the market. But times are changing, and I think your committee is on the right track to review this,” Garin said.

Senate President Sherwin Gatchalian said private investment should continue to play a major role in the oil industry but stressed that the government should have greater visibility into fuel pricing and cost components because the Philippines remains heavily dependent on imported oil.

He said stronger regulatory authority would help assure the public that fuel prices remain reasonable and that oil firms are not taking advantage of crisis situations.

Garin noted that, unlike electricity rates, oil prices are not monitored by a dedicated regulator.

“In oil, there is none, sir. There’s no entity or regulator on the price. It was left for competition,” she said.

The Senate hearing covered several bills seeking to amend, repeal or review the Oil Deregulation Act, including measures on fuel price transparency, mandatory unbundling of petroleum prices, consumer protection and expanded government authority during global oil supply disruptions.

Tulfo said the review is timely as fuel price increases continue to affect transportation costs, food prices, business expenses and household budgets, while geopolitical tensions pose continuing risks to the country’s fuel supply.