Santiago seeks to strengthen enforcement power of energy department

A bill seeking to strengthen the enforcement power of the Department of Energy (DOE) will be filed soon, a ranking energy official said.

DOE director Zenaida Monsada said the bill, to be authored by Sen. Miriam Santiago will not in, any way, counter or go against the existing oil deregulation law.

"In the last hearing of the Senate Committee on Energy, Sen. Santiago said she would sponsor a bill that would not repeal nor amend policies set by the oil deregulation law, but would work on its improvement in terms of the enforcement capabilities of the implementing authorities, particularly the DOE," Monsada said.

She noted that since the passage of the Oil Deregulation Act in 1998, the enforcement power of the DOE has weakened which somewhat led to the proliferation of abuses in the oil industry.

"After deregulation, the DOE lost its teeth. Since then, its licensing and other authorities were removed. The DOE was just tasked to monitor prices and if oil companies did not submit their report, under the current law, the penalty they would have to face is just imprisonment, and before you could have them imprisoned because of one report, it would seem inappropriate. What is needed perhaps are just calibrated sanctions," she said.

According to Monsada, "there would be no repeal, and that the deregulation policy is there to stay. Since there were a number of bills that push for the repeal of the Oil Deregulation Act, what Sen. Santiago proposed was that a substitute bill be filed with its thrust on enforcement to have an orderly competition."

The proposed bill will aim at expediting the sanctions being imposed by the DOE on an erring oil industry player. "For instance, in the past a persistent violator could be immediately closed down by the DOE. But now before we could do such, we would need to make recommendations to the LGU (local government unit). We have already recommended a number of closures but LGUs have yet to act on it," she said.

Aside from enforcement, the bill would also expand the police powers of the DOE. "The bill would basically add police powers to the DOE," she said.

She said there may be provisions in the bill that would enable the DOE to determine appropriate pricing of oil products.

"We also don’t know if the bill would put in place standards on how to assess reasonableness of pricing. Nowadays there is not any standard on what is reasonable, what is reasonable for us could not be reasonable for others."

It would be noted that since the passage of the Oil Deregulation Act, the DOE was stripped of its powers to meddle with oil prices. At present, oil companies are just being asked to submit report on their planned oil price movements at least a day before the actual adjustments.

Based on the current set-up, domestic oil prices are driven by market forces and competition.