G.R. No.

159149 June 26, 2006

The HONORABLE SECRETARY VINCENT S. PEREZ, in his capacity as the Secretary of the
Department of Energy, Petitioner,
vs.
LPG REFILLERS ASSOCIATION OF THE PHILIPPINES, INC., Respondent.

DECISION

QUISUMBING, J.:

Before us is a petition for review on certiorari under Rule 45, assailing the Decision1 and
Order2 of the Regional Trial Court of Pasig City, Branch 161, in SCA Case No. 2318, which
nullified Circular No. 2000-06-010 of the Department of Energy (DOE).

The facts are undisputed.

Batas Pambansa Blg. 33, as amended, penalizes illegal trading, hoarding, overpricing,
adulteration, underdelivery, and underfilling of petroleum products, as well as possession for
trade of adulterated petroleum products and of underfilled liquefied petroleum gas (LPG)
cylinders.3 The said law sets the monetary penalty for violators to a minimum of P20,000 and a
maximum of P50,000.4

On June 9, 2000, Circular No. 2000-06-010 was issued by the DOE to implement B.P. Blg. 33,
thus:

SECTION 4. NO PRICE DISPLAY BOARD

LPG Marketer/LPG Dealer/LPG Retail Outlet

1st Offense - Reprimand/warning letter

2nd Offense - Recommend suspension of business operation to the proper local

government unit

3rd Offense - Recommend business closure to the proper local government unit
and initiate criminal proceedings

SECTION 5. NO WEIGHING SCALE

A. LPG Refiller/Marketer

1st Offense - Fine of P5,000

2nd Offense - Fine of P10,000

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P3,000

2nd Offense - Fine of P7,000

 3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Reprimand

2nd Offense - Fine of P500.00

3rd Offense - Fine of P1,000.00

SECTION 6. NO TARE WEIGHT OR INCORRECT TARE WEIGHT MARKINGS.

(REQUIREMENT ON ENGRAVED TARE WEIGHT SHALL TAKE EFFECT TWO (2) YEARS
AFTER EFFECTIVITY OF THIS CIRCULAR)

A. LPG Refiller/Marketer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P2,000 for each cylinder

2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 7. NO APPROPRIATE OR AUTHORIZED LPG SEAL

A. LPG Refiller/Marketer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P2,000 for each cylinder

2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 8. NO TRADE NAME, UNBRANDED LPG CYLINDERS, NO SERIAL NUMBER, NO

DISTINGUISHING COLOR, NO EMBOSSED IDENTIFYING MARKINGS ON CYLINDER OR
DISTINCTIVE COLLAR OR DESIGN (REQUIREMENT ON SERIAL NUMBER AND
DISTINCTIVE COLLAR OR DESIGN SHALL TAKE EFFECT TWO (2) YEARS AFTER
EFFECTIVITY OF THIS CIRCULAR)

A. LPG Refiller/Marketer

1st Offense - Fine of P4,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 9. UNDERFILLED LPG CYLINDERS

A. LPG REFILLER/MARKETER

1st Offense - Fine of P4,000 for each cylinder

2nd Offense - Fine of P6,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. DEALER

1st Offense - Fine of P3,000 for each cylinder

 2nd Offense - Fine of P4,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG RETAIL OUTLET

1st Offense - Fine of P1,000 for each cylinder

2nd Offense - Fine of P2,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 10. TAMPERING, ALTERING, OR MODIFYING OF LPG CYLINDER THRU ANY

MEANS SUCH AS BUT NOT LIMITED TO CHANGING THE VALVE, REPAINTING, AND
RELABELLING BY ANY PERSON OR ENTITY OTHER THAN THE LEGITIMATE AND
REGISTERED OWNER OF THE SAME. FOR THIS PURPOSE, LPG REFILLER, MARKETER,
DEALER, OR RETAIL OUTLET, AS THE CASE MAY BE, WHO HAS POSSESSION OF SUCH
ILLEGALLY TAMPERED, ALTERED, OR OTHERWISE MODIFIED LPG CYLINDER SHALL
BE HELD LIABLE FOR THIS OFFENSE

A. LPG Refiller/Marketer

1st Offense - Fine of P5,000 for each cylinder

2nd Offense - Fine of P10,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

B. Dealer

1st Offense - Fine of P3,000 for each cylinder

2nd Offense - Fine of P5,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

C. LPG Retail Outlet

1st Offense - Fine of P1,500 for each cylinder

2nd Offense - Fine of P3,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 11. UNAUTHORIZED DECANTING OR REFILLING OF LPG CYLINDERS

1st Offense - Fine of P5,000 for each cylinder

2nd Offense - Fine of P10,000 for each cylinder

3rd Offense - Recommend business closure to the proper local government unit

SECTION 12. HOARDING OF PETROLEUM PRODUCTS INCLUDING LIQUEFIED

PETROLEUM GAS
 1st Offense - Fine of P10,000 per cylinder

2nd Offense - Recommend business closure to the proper local government unit
plus the filing of appropriate criminal action

SECTION 13. REFUSAL TO ALLOW OR COOPERATE WITH DULY AUTHORIZED

INSPECTORS OF THE ENERGY INDUSTRY ADMINISTRATION BUREAU (EIAB) OF THE
DEPARTMENT OF ENERGY IN THE CONDUCT OF THEIR INSPECTION/INVESTIGATION,
WHETHER REGULAR AND ROUTINARY OR COMPLAINT-INITIATED

1st Offense - Fine of P10,000

2nd Offense - Recommend business closure to the proper local government unit

SECTION 14. REFUSAL OR FAILURE TO PAY FINE The Department of Energy shall
recommend to the proper local government unit the closure of business of a respondent who
refuses or fails to pay any administrative fine without prejudice to the filing of an appropriate
criminal action if warranted.5

Respondent LPG Refillers Association of the Philippines, Inc. asked the DOE to set aside the
Circular for being contrary to law. The DOE, however, denied the request for lack of merit.

Respondent then filed a petition for prohibition and annulment with prayer for temporary
restraining order and/or writ of preliminary injunction before the trial court.

After trial on the merits, the trial court nullified the Circular on the ground that it introduced new
offenses not included in the law.6 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. The
decretal part of its Decision reads:

IN VIEW OF THE FOREGOING, this Court renders judgment declaring DOE Circular No. 2000-
06-010 null and void and prohibits the respondent from implementing the same.

SO ORDERED.7

The trial court denied for lack of merit petitioners motion for reconsideration. Hence this petition,
raising the following issues:

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "A CLOSE
SCRUTINY OF BP 33, PD 1865 AND R.A. NO. 8479 SHOWS THAT OFFENSES LIKE NO
PRICE DISPLAY [BOARD], NO WEIGHING SCALE, ETC. SET FORTH IN THE CIRCULAR
ARE NOT PROVIDED FOR IN ANY OF THE THREE (3) LAWS".

II

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "A
SCRUTINY OF THE NEW SET OF PENALTIES PROVIDED BY THE CIRCULAR SHOWS
THAT THE PENALTIES THIS TIME ARE BASED ON PER CYLINDER BASIS"; THAT "BEING
SUCH, NO CEILING WAS PROVIDED FOR AS TO THE ADMINISTRATIVE FINES"; THAT "AS
ILLUSTRATED BY THE PETITIONER, FOR JUST ONE LPG CYLINDER FOUND VIOLATING
AT LEAST SEC[TIONS] 6, 7, 8, 9, 10 AND 11 OF THE [CIRCULAR], A FINE OF P24,000.00 IS
IMPOSED;" AND THAT "THIS WILL CLEARLY BE BEYOND THE P10,000.00 PROVIDED BY
THE LAWS."
 III

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT SECTION 16
OF PETITIONERS CIRCULAR WHICH AUTHORIZES THE IMPOSITION OF PECUNIARY
PENALTIES WITH THE TOTAL FINE NOT EXCEEDING P20,000.00 FOR RETAIL OUTLETS
VIOLATES THE PENALTY CEILING OF P10,000.00 SET UNDER BP BLG. 33, AS AMENDED.

IV

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT SINCE
SECTION 5(g) OF R.A. 7638 FINDS NO REFERENCE IN DOE CIRCULAR NO. 2000-06-010,
THE SAME SHOULD BE DISREGARDED.

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT "ON THE
NEW OFFENSES INTRODUCED IN THE CIRCULAR SUCH AS SECTIONS 4, 5, 10, 13 AND
14 AND THE IMPOSITION OF THE GRADUATED PENALTIES ON A PER CYLINDER BASIS,
THIS COURT FINDS [NO] REASON TO DISTURB ITS FINDINGS THAT RESPONDENT-
MOVANT EXCEEDED ITS AUTHORITY. X X X IT SHOULD BE REMEMBERED THAT BP BLG.
33 AS AMENDED AND P.D. 1865 ARE CRIMINAL STATUTES AND MUST BE CONSTRUED
WITH SUCH STRICTNESS AS TO CAREFULLY SAFEGUARD THE RIGHTS OF THE
DEFENDANT."

VI

WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING THAT "THE ASSAILED
CIRCULAR SETS NO MAXIMUM LIMIT AS TO THE FINE THAT MAY BE IMPOSED ON AN
ERRING PERSON OR ENTITY TO WHICH FACT MOVANT CONCEDES. FOR ONE (1)
CYLINDER ALONE, NOT ONLY DOES THE CIRCULAR MAKE THE FINE EXCESSIVE TO
THE EXTENT OF BEING CONFISCATORY, BUT IT EVEN IMPOSES A PENALTY WHICH MAY
EVEN GO BEYOND THAT MAXIMUM IMPOSABLE FINE OF P50,000.00 SET BY P.D. 1865 IN
ITS SEC. 4 AFTER A CRIMINAL PROCEEDING."8

To our mind, the issue raised by petitioner may be reduced to the sole issue of whether the
Regional Trial Court of Pasig erred in declaring the provisions of the Circular null and void, and
prohibiting the Circulars implementation.

Petitioner argues that the penalties for the acts and omissions enumerated in the Circular are
sanctioned by Sections 19 and 3-A10 of B.P. Blg. 33 and Section 2311 of Republic Act No.
8479.12 Petitioner adds that Sections 5(g)13 and 2114 of Republic Act No. 763815 also authorize the
DOE to impose the penalties provided in the Circular.

Respondent counters that the enabling laws, B.P. Blg. 33 and R.A. No. 8479, do not expressly
penalize the acts and omissions enumerated in the Circular. Neither is the Circular supported by
R.A. No. 7638, respondent claims, since the said law does not pertain to LPG traders.
Respondent maintains that the Circular is not in conformity with the law it seeks to implement.

We resolve to grant the petition.

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.16
The Circular satisfies the first requirement. B.P. Blg. 33, as amended, criminalizes illegal trading,
adulteration, underfilling, hoarding, and overpricing of petroleum products. Under this general
description of what constitutes criminal acts involving petroleum products, the Circular merely
lists the various modes by which the said criminal acts may be perpetrated, namely: no price
display board, no weighing scale, no tare weight or incorrect tare weight markings, no authorized
LPG seal, no trade name, unbranded LPG cylinders, no serial number, no distinguishing color,
no embossed identifying markings on cylinder, underfilling LPG cylinders, tampering LPG
cylinders, and unauthorized decanting of LPG cylinders. These specific acts and omissions are
obviously within the contemplation of the law, which seeks to curb the pernicious practices of
some petroleum merchants.

As for the second requirement, we find that the Circular is in accord with the law. Under B.P. Blg.
33, as amended, the monetary penalty for any person who commits any of the acts aforestated is
limited to a minimum of P20,000 and a maximum of P50,000. Under the Circular, the maximum
pecuniary penalty for retail outlets is P20,000,17 an amount within the range allowed by 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 B.P. Blg. 33 prescribes are
the minimum and the maximum limits of penalties.

Clearly, it is B.P. Blg. 33, as amended, which defines what constitute punishable acts involving
petroleum products and which set the minimum and maximum limits for the corresponding
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.

Noteworthy, the enabling laws on which the Circular is based were specifically intended to
provide the DOE with increased administrative and penal measures with which to effectively
curtail rampant adulteration and shortselling, as well as other acts involving petroleum products,
which are inimical to public interest. 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.

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.

No pronouncement as to costs.

SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice

CONCHITA CARPIO MORALES DANTE O. TINGA

Associate Justice Asscociate Justice
 PRESBITERO J. VELASCO, JR.
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation,
I certify that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes

1 Rollo, pp. 64-72. Penned by Judge Alicia P. Mario-Co.

2
Id. at 73-77.

3 SEC. 2. Prohibited Acts. The following acts are prohibited and penalized:

(a) Illegal trading in petroleum and/or petroleum products;

(b) Adulteration of finished petroleum products, or possession of adulterated

finished petroleum products for the purpose of sale, distribution, transportation,
exchange or barter;

(c) Underdelivery or underfilling beyond authorized limits in the sale of petroleum

products or possession of underfilled liquefied petroleum gas cylinder for the
purpose of sale, distribution, transportation, exchange or barter;

xxxx

[(b)] (D) Hoarding of petroleum and/or petroleum products;

[(c)] (E) Overpricing in the sale of petroleum products;

[(d)] (F) Misuse of petroleum allocations;

[(e)] (G) Speed contests and rallies involving mainly the use of motor vehicles,
motor-driven watercraft or aircraft utilizing petroleum-derived fuels, including car
and motorcycle rallies and drag racing, without the permit from the Bureau of
Energy Utilization; and
 [(f)] (H) Sky-diving, and water-skiing except when methanol is used for the power-
boat operation.

4 SEC. 4. Penalties. Any person who commits any act herein prohibited shall, upon
conviction, be punished with a fine of not less than [two] TWENTY thousand pesos
[(P2,000)] (P20,000) but not more than [Ten] FIFTY thousand pesos [(P10,000)]
(P50,000).

5 Rollo, pp. 274-280.

6Batas Pambansa Blg. 33 (1979), Presidential Decree No. 1865 (1983), or Republic Act
No. 8479 (1998).

7 Rollo, p. 72.

8 Id. at 500-502.

9 SECTION 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.

10 Section 3-A (inserted by Section 3 of PD No. 1865) reads:

"SEC. 3-A. 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.

xxxx

"The administrative sanction that may be imposed shall be without prejudice to

the filing of a criminal action as the case may warrant."

SEC. 23. Implementing Rules and Regulations. The DOE, in coordination with the
11

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.

12 An Act Deregulating the Downstream Oil Industry, and For Other Purposes.

13SEC. 5. Powers and Functions. The Department shall have the following powers and
functions:

xxxx

(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;

14 SEC. 21. Appropriations. x x x

Subject to existing rules and regulations, the funds and monies collected or which
otherwise come into the possession of the Department and its bureaus from fees,
surcharges, fines and penalties which the Department and its bureaus may
impose and collect under this Act, x x x shall be disbursed for expenses
necessary for the effective discharge of the powers and functions of the
Department under this Act.

15An Act Creating the Department of Energy, Rationalizing The Organization and
Functions of Government Agencies Related to Energy, and For Other Purposes.

16 See United States v. Panlilio, 28 Phil. 608, 613-614 (1914).

17 DOE Circular No. 2000-06-010.

SEC. 16. Maximum Total Penalty. In the imposition of pecuniary penalties the
total fine shall not exceed Twenty Thousand Pesos (P20,000.00) for retail outlets.