WEEK 1

02 MACEDA V. ENERGY REGULATORY BOARD

FACTS

Petitioners (Senator Maceda and Atty. Lozano) pray for injunctive relief to stop the Energy
Regulatory Board from implementing its order mandating a provisional increase in the
prices of petroleum and petroleum products.
Caltex, Shell and Petron tendered separate applications with the Energy Board for
permission to increase the wholesale of petroleum prices and for provisional authority to
increase temporarily wholesale posted prices pending further proceedings.
The Energy Regulatory Board in a joint order granted the relief and provisional increase.
Senator Maceda submits that the order had been issued with grave abuse of discretion
tantamount to lack of jurisdiction and was issued without proper notice and hearing in
violation of Section 3 par e of EO 172 (Creating the Energy Regulation Board)
Atty Lozano likewise argues that the Board’s Order was issued without notice and hearing
hence without due process

ISSUE

Whether or not the order was valid

HELD

Senator Maceda and Atty Lozano have overlooked the provisions of Section 8 of EO 172
which authorizes the Board to grant provisional relief on motion of a party in the case or
on its own initiative, without prejudice to a final decision after hearing, should the Board
find that the documentary evidences substantially support the provisional order. Provided,
That the Board shall immediately schedule and conduct a hearing thereon within thirty
(30) days thereafter, upon publication and notice to all affected parties

Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate
exclusively of the other, in that the Board may resort to one but not to both at the same
time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may
decree a price adjustment, subject to the requirements of notice and hearing. Pending
that, however, it may order, under Section 8, an authority to increase provisionally, without
need of a hearing, subject to the final outcome of the proceeding.

Dissenting: Paras
The ERB gravely abused its discretion in approving the increase in oil prices without a
prior hearing; "Public Interest" necessitated a prior hearing.
In fixing the oil prices complained of, the Energy Regulatory Board (ERB) gravely abused
its discretion—(1) in approving the prices without due process of law, and (2) in exercising
the taxing power in gross violation of the 1987 Constitution which vests such power only
in Congress. With respect to due process, it will be noted that it is Sec. 3(e) (and not Sec.
8) of Ex. Order No. 172 which should apply to the instant case (and therefore a hearing
is essential) for it is Sec. 3(e) that refers to "the temporary adjustment of the levels of
prices of petroleum products" or instances "when public interest so requires." Sec. 8,
which is relied upon by the majority opinion, does NOT speak of price increases.
Additionally, it is clear that in the instant case, "public interest" [also mentioned in Sec. 3
(e)] necessitated a prior hearing.

Notes:

Sec. 8. Authority to Grant Provisional Relief. The Board may, upon the filing of an
application, petition or complaint or at any stage thereafter and without prior hearing, on
the basis of supporting papers duly verified or authenticated, grant provincial relief on
motion of a party in the case or on its own initiative, without prejudice to a final decision
after hearing, should the Board find that the pleadings, together with such affidavits,
documents and other evidence which may be submitted in support of the motion,
substantially support the provisional order: Provided, That the Board shall immediately
schedule and conduct a hearing thereon within thirty (30) days thereafter, upon
publication and notice to all affected parties.

Sec. 3. Jurisdiction, Powers and Functions of the Board. When warranted and only when
public necessity requires, the Board may regulate the business of importing, exporting,
re-exporting, shipping, transporting, processing, refining, marketing and distributing
energy resources. Energy resource means any substance or phenomenon which by itself
or in combination with others, or after processing or refining or the application to it of
technology, emanates, generates or causes the emanation or generation of energy, such
as but not limited to, petroleum or petroleum products, coal, marsh gas, methane gas,
geothermal and hydroelectric sources of energy, uranium and other similar radioactive
minerals, solar energy, tidal power, as well as non-conventional existing and potential
sources.
The Board shall, upon proper notice and hearing, exercise the following, among other
powers and functions:
(a) Fix and regulate the prices of petroleum products;
(b) Fix and regulate the rate schedule or prices of piped gas to be charged by duly
franchised gas companies which distribute gas by means of underground pipe system;
(c) Fix and regulate the rates of pipeline concessionaries under the provisions of Republic
Act No. 387, as amended, otherwise known as the "Petroleum Act of 1949," as amended
by Presidential Decree No. 1700;
(d) Regulate the capacities of new refineries or additional capacities of existing refineries
and license refineries that may be organized after the issuance of this Executive Order,
under such terms and conditions as are consistent with the national interest;
(e) Whenever the Board has determined that there is a shortage of any petroleum product,
or when public interest so requires, it may take such steps as it may consider necessary,
including the temporary adjustment of the levels of prices of petroleum products and the
payment to the Oil Price Stabilization Fund created under Presidential Decree No. 1956
by persons or entities engaged in the petroleum industry of such amounts as may be
determined by the Board, which will enable the importer to recover its cost of importation.