Perez v.

LPG Refillers Association

G.R. 159149– June 26, 2006
J. Quisumbing

Topic: A Surprise Topic

Doctrine: For an administrative regulation to have the force of penal law, (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.

Petitioner: Vincent Perez (Secretary of Department of Energy)

Respondents: LPG Refillers Association of the Philippines, Inc.

Case Summary: The respondent is assailing the validity of the implementing Circular of BP33, the law
penalizing acts involving petroleum products. It is arguing that some acts or omissions mentioned in the
Circular are not part of the law. The SC says otherwise. The Circular is valid since it satisfies the
requirement for a valid administrative regulation [SEE DOCTRINE]. The SC reiterated that the acts
mentioned in the Circular gave the specifics for the “general” terms mentioned in the law.

Facts:
 LPG Refillers Association of the Philippines, Inc. [Respondent] is assailing the validity of
Department of Energy’s [DoE] Circular No. 2000-06-010, the implementing circular of BP33, for
being contrary to law. BP33 penalizes illegal trading, hoarding, overpricing, adulteration,
underdelivery, and underfilling of petroleum products. BP33 sets the monetary penalty for violators
to a minimum of P20,000 and a maximum of P50,000.
 Respondent is arguing that the circular contains acts and omissions not expressly penalized by
BP33 and RA8479 (Downstream Oil Industry Deregulation Act of 1998). NOTE: The full list of
acts and omissions penalized by the Circular is found in the full text. Some headers are: (1) No
Price Display Board, (2) No Weighing Scale, (3) No Tare Weight or Incorrect Tare Weight
Markings, (4) No Appropriate LPG Seal, (5) No Trade Name, Unbranded LPG Cylnders, No Serial
Number, etc.
 RTC Ruling: RTC nullified the circular on the ground that it introduces offenses not included in
the law. The court intimated that the Circular, in providing penalties on a per cylinder basis for
each violation, might exceed the maximum penalty under the law.

Issues + Held:
1. W/N the RTC erred in declaring the provisions of the Circular null and void, and prohibiting
the Circular’s implementation [YES]
  DoE’s Defense: The penalties for the acts and omissions enumerated in the Circular are sanctioned
by Sections 11 and 3-A2 10 of BP33, and Section 233 of RA 8479. Added to this, Sections 5(g)4 and
21 of RA7638 also authorize the DoE to impose the penalties provided in the Circular.
 [IMPT] SC: For an administrative regulation, such as the Circular in this case, to have the force of
penal law, (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.
o On the first requirement: Under the general description of what constitutes criminal acts
involving petroleum products (adulteration, underfilling, hoarding, etc.), the Circular
merely lists the various modes by which the said criminal acts may be perpetrated (no
weighing scale, no tare weight, no authorized seal, etc.). These specific acts and omissions
are obviously within the contemplation of the law, which seeks to curb the pernicious
practices of some petroleum merchants.
o On the second requirement: Under the Circular, the maximum pecuniary penalty for
retail outlets is P20,000, which is within the P20k – P50k range imposed by the law.
However, for the refillers, marketers, and dealers, the Circular is silent as to any
maximum monetary penalty. This mere silence, nonetheless, does not amount to violation
of the aforesaid statutory maximum limit. Further, 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 BP33
prescribes are the minimum and the maximum limits of penalties.
 The Circular merely implements the said law, albeit it is silent on the maximum pecuniary penalty
for refillers, marketers, and dealers. Nothing in the Circular contravenes the law. To nullify the
Circular in this case would be to render inutile government efforts to protect the general consuming
public against the nefarious practices of some unscrupulous LPG traders.

Ruling: WHEREFORE, the petition is GRANTED. The assailed Circular No. 2000-06-010 of DOE is
declared valid. The Decision and Order of the Regional Trial Court of Pasig City, Branch 161, in SCA Case
No. 2318, nullifying said Circular and prohibiting its implementation are hereby REVERSED and SET
ASIDE.

1 Declaration of Policy. — It is the declared policy of the State to institutionalize as a national way of life energy conservation
geared towards the judicious and efficient use of energy in order to enhance availability of energy supplies required to support
economic, social and developmental goals. In view of the continuing uncertainty of the international oil supply, it is imperative that
measures to conserve energy be strengthened and that acts and activities involving petroleum and/or petroleum products contrary
to the intent and spirit of judicious usage and conservation of energy, which are inimical to the public interest and national security,
be prohibited and appropriate sanction therefor be imposed.
2 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. . . .
xxx xxx xxx
The administrative sanction that may be imposed shall be without prejudice to the filing of a criminal action as the case may
warrant.
3 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.
4 SEC. 5. Powers and Functions. — The Department shall have the following powers and functions: (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;