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Republic of the Philippines
DEPARTMENT OF ENERGY

DEPARTMENT CIRCULAR NO. __2C2005-08-007 GD

GUIDELINES IMPLEMENTING THE REQUIREMENT OF A
PRIOR NOTICE ON PRICE ADJUSTMENTS PURSUANT TO
MEMORANDUM CIRCULAR NO. 2001-05-002

Pursuant to Sections 14 (a) and 15 (a), (b.ii) and (g), Chapter IV of Republic
Act No. 8479 or the Downstream Oil Industry Deregulation Act of 1998 and in
order for the Department of Energy (DOE) to monitor movements of domestic
oil prices, the DOE hereby adopts the following guidelines to implement and
clarify the said Memorandum Circular.

ARTICLE | — GENERAL PROVISIONS ©

Section 1. Title

These guidelines shall be known as “Implementing Guidelines for the
Requirement of Prior Notice on Price Adjustments of Industry Players” and
shall be hereafter referred to as the “Guidelines”.

Section 2. Scope and Coverage

These Guidelines shall apply to any person or entity engaged in business
activities provided under Section 5, Chapter 2 of R.A. No. 8479 (Oil
Companies), selling the following Petroleum Products: gasoline, diesel,
kerosene, jet fuel, bunker fuel oil and liquefied petroleum gas (LPG).

ARTICLE Il — PRIOR NOTICE ON PRICE ADJUSMENTS
Section1. Notification Requirements
a) For price increase: Oil Companies shall notify the DOE within one (1)
day, but not less than six (6) hours, prior to implementing any intended
price increase and prior to any public announcement of said movement.
b) For price reduction: Oil Companies shall notify the DOE prior to

implementing any intended price reduction and prior to any public
announcement of said movement.

i
Energy Center, Merritt Rd., Fort Bonifacio, Taguig, Metro Manila, Philippines
Tels.: (Trunks) 840-1401 to 40; Fax 840-1731; 840-2236; 840-2067 (Domestic); 632 840-1731, 632 840-2236; 632 840-2067 (International)

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ARTICLE ill -— FORM AND CONTENTS OF NOTICE
Section 1. Initial Notice

A notice sent via SMS message shall be deemed in compliance with this
Circular when the following conditions are met:

a. the message is sent to and received by the Undersecretary who
exercises supervision over the Oil Industry Management Bureau
(OIMB), the OIMB Director and the Division Chief of the Oil Industry
Competition and Monitoring Division (OICMD) and duly acknowledged

by any of them:

b. the message is sent within the timeframe specified in Article II hereof;
and

c. upon subsequent submission of a formal notice required in Section 2
below.

SMS message should include the list of products subject to the price
adjustment, the corresponding price adjustment, the time and date of
effectivity of such price adjustment, the cause of adjustment and why such
magnitude and timing are reasonable.

Section 2. Formal Notice

A formal notice of any price adjustment shall be submitted to the officials
referred to in Article II], Section 1(a), and to the DOE Secretary indicating
therein the required details on the day that the price adjustment takes effect.
A formal notice shall be in any of the following forms and duly acknowledged
received at least by the OIMB:

a. a letter;
b. a facsimile copy; or
c. anelectronic mail.

If the price adjustment is intended to take effect on a non-working day, the
formal notice shall be submitted not later than on the first working day
following the adjustment.

ARTICLE IV — FINAL PROVISIONS
Section1. Penalties
Any failure to comply with the provisions of these Guidelines shall be

governed by the terms of Section 12(a) of R.A. No. 8479, in relation to Section
15 of the said Act and shall be punishable in accordance therewith.

Section 2. Public Announcement of Price Adjustments

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Compliance with the provisions of these Guidelines shall be without prejudice
to the Oil Companies’ privilege of initiating their own public announcement of
intended price adjustments.

Section 3. Effectivity

These Guidelines shall take effect fifteen (15) days after its complete
publication in a newspaper of general circulation.

Issued in Fort Bonifacio, Taguig, Metro Manila this ith day of Auguct 2005.

Poe Po
fi Ne, Care wes a

RAPHAEL P. M. LOTILLA
Secretary