The Department of Energy (DOE) has issued a new circular as the agency steps up monitoring of inventory flows of oil companies, as well as their compliance to industry rules and reportorial requirements.

Department Circular No. DC2021-09-0029 has been issued by DOE to guide its actions when it comes to the “effective monitoring of the activities” of the players in the deregulated downstream oil sector.

Oil companies have been warned that “failure to comply with the submission of notices or reports will cause the suspension of the acknowledgment of the offending party as DOI (downstream oil industry) participant or its accreditation as a DOI biofuel participant.”

Non-compliance, according to the DOE, “could also result in the cancellation or suspension of any application or request of the concerned party to the DoE in relation to its DOI operations.”

The department conveyed that administrative fines ranging from P50,000 to P100,000 “may be imposed on a per violation basis, depending on the nature of the offense.”

The DOE stressed that the gravity of some industry violations may likewise warrant the filing of criminal charges “against the non-compliant party, separate from the imposition of such fines or the initiation of an administrative sanction.”

As prescribed, the oil firms are mandated “to regularly submit to the Oil Industry Management Bureau (OIMB) of the DOE their monthly, quarterly and annual reports about their profile, activities and inventory flow.”

Under existing rules, the oil companies importing finished petroleum products are required to have at least 15-day inventory; while refiner Petron Corporation will need 30-day crude inventory.

The industry players were also directed “to submit special reports regarding maintenance shutdown, oil spill notification, weekly oil spill progress report, as well as calamity or emergency damage assessment and daily progress report on such matters.”

Energy Secretary Alfonso G. Cusi explained that“this Circular strengthens the department’s mandate to continuously monitor the compliance of the downstream oil industry participants in the implementation of the existing rules and regulations requiring the submission of necessary notices and reportorial requirements pursuant to the Downstream Oil Industry Deregulation Act.”

By far, the energy department has ‘supervisory powers’ over the weekly pricing adjustments of the oil companies, but it has its hands tied as far as requiring them to itemize the cost components being passed on at the pumps – because Court rulings on that matter had not been favorable to the DOE.

The energy department emphasized that its newly-issued Circular “applies to all refiners, importers, bulk distributors, terminal operators/lessors; bunker traders; haulers and own users of crude oil and finished petroleum products; as well as all blenders, marketers and own users of base oils and lubricating products.”

Within a decreed transition phase, it was stipulated by the energy department that “the use of new formats for notices and monthly reports will be implemented on the second month the Circular took effect.”

It was further stated that “the use of the new formats for the quarterly report will be implemented on the next quarter following the effectivity of the Circular.” The Circular is deemed effective 15 days after publication in two newspapers of general circulation.

Source: Manila Bulletin (