Due to Republic Act 8479 entitled “Downstream Oil Industry Deregulation Act of 1998” approved on February 10, 1998, the Philippine government effectively reduced its control on oil-related pricing activity and trade restrictions. Then, it would bring about a free interaction of market forces that would eventually lead to hindrance of fair competition in the market. 0 0. 2. Due to an oil crisis’ occurrence in 1997, the government created the Oil Industry Commission (OIC) to regulate the goings-on of businesses working with oil. From … Third, the law will sire an even more powerful oligopoly whose power to the market will take advantage of the consumers’ general welfare. Watch Queue Queue. Data-gathering will take place within Metro Manila and during the 2nd term of the academic year 2013 – 2014. No. It is notable that the so-called Big 3 oil players (Petron, Chevron and Shell) used to corner nearly 100 percent of the Philippine petroleum market before the passage of the Downstream Oil Industry Deregulation Act of 1998. REVIEW OF RELATED LITERATURE INTRODUCTION The researchers will cover four important topics central to the thesis. Thus, if the law is to be retained, what needs to be explored is on how the government can deal the issue at hand with the existing law in place. International oil price data show local oil prices should have been going down rather than up. The transparency of the oil prices has been an issue for the consumers as oil price hikes have not stopped since the law was approved by the congress. AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. If it has been found that the oil deregulation law is against the constitution or perhaps failed to induce competitiveness, the government would do well to reconsider and implement new policies or even revise or amend it for the sake of public welfare. The CTRP includes the maintenance of the current VAT on oil products, and a three-phase increase in excise tax on oil. 8479 February 10, 1998. 25 The petitioner claimed that acceleration of the transition phase was pro-oligopoly, anti-competition, and anti-people for the reason that the short transition period was not enough to establish true competition in the local oil industry. 8479. This Circular establishes the procedures for the Philippine contracting round in petroleum prospective areas. The most controversial issue surrounding the act is the overpriced petroleum products and frequent increases, with vague reasons, but seldom rollbacks like a two-step-forward-one-step-backward situation. Academic Content. DigitalEssay.net is ready to help with any kind of academic writing! House Bill (HB) 255 claimed the inaction of the government, specifically the Department of Energy (DOE), even if faced by such oil price adjustments. Section 14 of the Downstream Oil Industry Deregulation Act of 1998 mandates the DOE to monitor and publish daily international crude oil prices, as well as follow the movements of domestic oil … Proposed solution # 2 (scrap/repeal the Oil Deregulation Law) is therefore a better option. In a budget hearing in Congress, DOE Assista MANILA, Philippines — The Department of Energy (DOE) wants to amend the oil deregulation law and allow the energy secretary to define the maximum price of oil, among others. 8479• Downstream Oil Industry Deregulation Actof 1998• Complete no government interference• DTI as monitorIn the Philippines…Oil DeregulationFin 111 – AY02 18. To sort out pricing The Department of Energy (DOE) is pushing for new amendments to Republic Act 8479 or the Downstream Oil Industry Deregulation Act – and the specific agenda this time is to define “fair pricing adjustment” at the retail pumps. Accompanying oil deregulation was the abolishment of the OPSF. can send it to you via email. 6 of the R. A. MANILA, Philippines Sen. Sherwin Gatchalian is contemplating a review of the Oil Deregulation Law to impose stricter monitoring of oil inventories and price hikes and harsher penalties for non-compliant oil companies and negligent government … For he claims that Sec. On another note, a law may be good on paper but not in practice. Therefore, you can buy oil when prices are low, and then use them when prices are high. An illuminating backlash against deregulation is taking shape in a corner of the oil market important for reasons other than size. 19 of R. A. 29 The Supreme Court Justice at that time, Corona, thought that his petition lacked legal basis even though it seem beneficial to the public. Section 1. GET YOUR CUSTOM ESSAY 23 Rep. Garcia pointed out four reasons for the unconstitutionality of R. A. Working 24/7, 100% Purchase 9 Part of the competition policy framework is the liberalization and deregulation of select Philippine industries such as the maritime industry, civil aviation, telecommunications, energy and utilities. Phase one, the transition phase which started in August 1996, aims to take away control over non-pricing related aspects while phase two, the full deregulation phase, now includes the pricing itself, which abolishes the OPSF. 4 In March 1996, Republic Act No. This video is unavailable. 8180 was too much for the new competitors to compete with the established oil companies here in the country. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. Gregorio del Pilar's Last Stand, An aerial shot of the Strategic Petroleum Reserve in Texas, Workers rally for repealing oil deregulation. The automatic oil pricing mechanism was maintained in order to estimate the local prices of gasoline products in the global market. The high court, however, denied the petition on the grounds, basically, that the argument of the petitioner is not against the law itself, but just against the timeliness of the provided duration for the full deregulation phase. It may also reduce the problem brought by the weakness of the Philippine peso. The knowledge and to rescind or alter laws were the job of the legislation. Economic efficiency is comprised of three components namely: (1) Productive efficiency; (2) Allocative efficiency; and (3) Dynamic efficiency. It also violates the goal of the oil deregulation law, which is to make the oil market competitive under a system of fair prices. Contrary to expectations, diesel and other petroleum product prices have consistently risen at a seemingly accelerating rate unfair to the average Filipino. Piston submits 7 demands to Aquino. AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY AND FOR OTHER PURPOSES. Signed on February 10, 1998, RA 8479 or the Downstream Oil Industry Deregulation Act of 1998 liberalized the industry to ensure a competitive market. 19, not the essence of it. Since then, deregulation of select economic industries, such as civil aviation, telecommunication, electric power, and downstream oil industry, have been implemented. It is therefore in both private and public interests that the policy’s actual effect and its constitutionality be tested through empirical analyses. To provide a more broad view on the matter being discussed, the author interviewed five people from different sectors and of different specializations. No. 19 should be declared null and void for the transition and full deregulation should have price controls that should protect the public interest from the big three oligopoly’s price fixing and overpricing. 19 were to be dismissed, there will never be full deregulation and would provide a new law that is different from what was already enacted. The researchers will interview lawyers to see if there is an unconstitutional provision within the act’s content and from economists to assess if the effects from the act’s implementation is really in a positive note. Cmty. 3247 (An Act to Prohibit Monopolies and Combinations in Restraint of Trade), The Philippine Corporation Code Batas Pambansa Blg. 21 The judicial review also pointed out provisions that will make the oil industry be more attractive to potential competitors that should support the anti-trust protection of the R. A. The oil deregulation law’s goal is part of the framework that the constitution wants to achieve. ENERGY Secretary Alfonso Cusi is pushing for the revision of the oil deregulation law so his office can enforce a proposed policy that seeks to unbundle fuel prices. The effectiveness of the program in the U.S. case had been witnessed during the 1990 oil crisis. No. 8479 particularly; the 4% tariff differential, minimum inventory level, and predatory pricing provisions. What the government can do is effective enforcement and implementation of the law. In a budget hearing in Congress, DOE Assistant Secretary Leonido J. Pulido III disclosed that the department is “collaborating with the Philippine Competition Commission precisely because the Oil Deregulation Law failed to define what is unfair or unjust pricing – and that’s one of the challenges that the DOE is facing when it comes to monitoring prices.” In his eagerness to write history for all the people around the world, he began the. Or in other countries as well. 30, 47 Bergen St--Floor 3, Brooklyn, NY 11201, USA, Sorry, but copying text is forbidden on this 8479, the Downstream Oil Industry Deregulation Act of 1998, is consistent with what the constitution provides for. 8479. 2 Answers. 8180 AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of representative of the Philippines in Congress assembled: CHAPTER I – GENERAL PROVISIONS SECTION 1. Competition policy contains actions to keep or create competiveness in economic industries, which taking away the power of the government to take control of it, is included. Anonymous. No. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. Watch Queue Queue The Big 3 saw their combined market share decline to 85 percent in 2006. Pugad Lawin and the Start of the Revolution, Reserving the nation: ROTC in the Philippines, Lessons on the Peace Process from the Pact of Biak-na-Bato, Conscious Hero or Man of No Ego? What makes this an alternative to the OPSF is that the country does not keep prices down by pouring in money to oil companies. The main objective of the ODL is to promote a truly competitive market, but did the law actually do so? Marya Salamat March 25, 2014 George San Mateo, Oil deregulation law, Piston. website. The Philippines is presently having serious concerns with the effects brought by Oil Deregulation Law.1 As the fact that it permits oil companies to freely adjust their oil prices that led to the increase of other basic commodities and resulted to economic crisis as people defined.2. The newer act retains almost everything except the unconstitutional provisions present in the previous law. This means that oil firms in the Philippines pegged pump prices at crude oil prices that are about four to six times of the actual production costs. If, however, the opposite has been concluded and the oil deregulation is in fact deemed to attain its goals, the government must focus its energies towards ensuring that the expected benefits are actually felt by consumers. The last three solutions presented explored what the government can do beyond tweaking the legal provisions of deregulation. If the latter is the answer, then it’s affecting the Filipino majority negatively, meaning the deregulation of the oil industry is actually unconstitutional because it violates the for-the-people essence of our constitution. 8180 to R. A. 28 As Garcia listen to these counter arguments, he said that he was just asking for the constitutionality of Sec. The last part of the literature review will give insights about the status of the oil industry as of today. No. The law is formally known as Republic Act 8479, or the “Downstream Oil Industry Deregulation Act of 1998.” The DoE has been exploring ways to mandate oil companies to itemize the components of their fuel prices, including the industry’s take, for more transparency. DOE Circular No. In the transition phase, all non-pricing facets were lifted. ”6 The Supreme Court points out that the act does not make a truly competitive market because of the 4% difference on the tax imposition on existing businesses versus new comers. The years that passed for Philippine deregulation of the oil industry has its own successes and failures. Another example in the U.S. case would be in the period 1999-2000, oil prices in the world market increased by 71.7%, while prices for gasoline in the U.S. increased only by 45.2%. 3 Department of Energy (DOE) was created on December 9, 1992, with its focus to privatize energy-related government agencies, to deregulate power and energy industry, and to reduce oil-fired plants dependency resulting to Petron’s privatization in 1993. The literature gave the definition of an oligopolistic market and indications of anti-competitive practices. Under Philippine import laws, it is the responsibility of the importer to ensure that any product entering the country’s customs territory is in full compliance with Philippine health and phytosanitary regulations. 471 in March 14, 1998. In response to the consequences of deregulation, the first three solutions presented explored what can be done with the existing law in force. This law amends certain sections of PD 87, offering improved fiscal and contractual terms to service contractors with special reference to deepwater oil exploration. Deregulation and other measures are used in order to promote economic efficiency. They also claim that the short transition period was not against the mandate of the constitution because the new competitors were given enough time to set up their businesses in the manner captured at least 3% of the market share. All he said points out to the question, whether or not the execution of deregulating the oil industry conflicts the mandate of free competition under section 19, Article XII of the 1987 constitution. Republic Act (RA) 8479 was passed into law in 1998. Issues about the oil market today, regarding possible oligopoly, predatory pricing, and consumer well-being should be taken a look at. 2003-05-005. FOR ONLY $13.90/PAGE, Deregulation of media access and rates increasing…, Comparative Analysis of the Family Code and Code of…, Planned Parenthood of Southeastern Pennsylvania v. Casey. And, extending the transition period would bring back the automatic pricing mechanism which means that it will only replace the mode of price regulation by still another regulatory scheme. The thrust towards deregulation was characterized by the passage of RA 8180 (An Act Deregulating the Downstream Oil Industry) in 1996, which basically deregulated the oil industry. Discussed in this part are bills that seek to either amend or repeal the ODL, the grounds that makes the law unconstitutional and the violated provision in the Constitution. The case focused on the changed provisions of R. A. What are the bad effect of the Oil Deregulation Law in the Philippines? Horizontal agreements, where firms agree to the pricing of a good, giving them ability to control prices. This assumption will be studied later on. To break the foreigners’ control, with President Marcos’ initiative, the Philippine National Oil Corporation (PNOC). Lastly, because of the hastened transition, he pointed out that Sec. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. Ang may mga hawak nito ay ang The Big Three (shell, petron at Caltex) na kung saan sila-sila na lamang ang nagdidikta ng presyo ng langis dahil sa kanilang mga ispekulasyon ng di-umanong “shortage”. 15 Market structures are also enumerated and described here. HAVEN’T FOUND ESSAY YOU WANT? DEPARTMENT CIRCULAR NO. For the first part of this series, read here. The people are forced to just accept whatever reason the oil companies and the Department of Energy gives. 8180, to be unconstitutional1, is a brief history of the Philippine oil industry. Marya Salamat February 10, 2015 1 Comment Oil cartel in the Philippines, Oil deregulation law, oil price hike. Notably Petron Corp. at the top, followed by Pilipinas Shell and Chevron Corp. No. Policy issues are within the domain of the political branches of government and of the people themselves as the repository of all state powers. The digest also pointed out the control of foreign companies over the industry, where almost every operations in the country at the time is owned by these companies. Boys Who Cry? If you need this or any other sample, we What was the economic state of the Philippines before the enforcement of the RA 8479? With the Constitution’s anti-monopolistic agenda particularly, Sec. The statement by the Philippines Tariff Commission about competition policy is an evidence that the government should issue anti-competitive practices in the country. First, the provisions laid down were already advantageous to the major competitors; it will give more power to the oligopoly of the big three. 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