The Department of Energy (DOE) on Wednesday said the takeover of operations of any person or entity engaged in the downstream oil industry is a last resort during times of national emergency to protect public interest.
“The DOE is committed to implementing Section 14(e) of the said law as the public interest may require in times of national emergency, in accordance with the Constitution and the applicable laws and consistent with the President’s intent or instructions,” the agency said in a statement.
The DOE said it respects and supports the ruling of the Supreme Court, which authorizes the agency to temporarily take over the operations of any person or entity engaged in the downstream oil industry.
The DOE said it will study fully with the Department of Justice and the Office of the Solicitor General the clarifications made by the SC “and will take such steps as may be necessary to ensure that this measure of last resort is properly exercised whenever needed.”
The SC ruling upholds the constitutionality of Section 14(e) of Republic Act No. 8479 or the Downstream Oil Industry Deregulation Act of 1998 that authorizes the DOE in times of national emergency to temporarily take over or direct the operation of any person or entity engaged in the downstream oil industry.
“The DOE will also continue to consult and work with all stakeholders on maximizing and diversifying sources of energy supply, enhancing its distribution and availability to the public at reasonable prices, managing the prioritization of demand to avoid or minimize potential constraints, and strengthening overall capacity to bounce back from interruptions,” the agency said.
The oil firms did not issue any reaction on the DOE statement as of press time.
The SC decision, penned by Senior Associate Justice Marvic Leonen and promulgated on Feb. 21, 2023 but made public only last Mar. 4, arose from a petition filed by then former executive secretary Leandro Mendoza, the late DOE secretary Angelo Reyes and the DOE-DOJ Joint Task Force, assailing the 2013 ruling of the Court of Appeals that deemed the provision unconstitutional.
The case stemmed from former President Gloria Macapagal-Arroyos’ executive order issued on Oct. 2, 2009, directing oil industry players to maintain petroleum products prices in the aftermath of typhoons ‘Ondoy’ and ‘Pepeng.’
Pilipinas Shell Petroleum Corp. (now Shell Pilipinas Corp.) found Arroyo’s order prejudicial and filed a petition before the Makati Regional Trial Court, arguing that the executive order was “unreasonable, oppressive, and invalid delegation of power to the Executive.”
In ruling against the Pilipinas Shell, the SC pointed out the President’s prerogative to determine national emergencies and the propriety of delegating authority to the DOE.