IN THE MATTER OF VIOLATION OF x----------------------------------------------------------x

DOE LAWS, RULES AND REGULATIONS

BEL STAR GAS STATION (LPG Retail

Outlet) and/or FELIPE M. CAINGAT,
Owner/Operator,
OLS CASE NO.: 2018-RO-0220
Docketed:
BEL STAR CYCLE PARTS & GENERAL
MERCHANDISE and/or FELIPE M.
CAINGAT, Owner/Operator,
Respondent.

RESOLUTION
Considering that the present cases involve a common question of fact, and in line with
the constitutionally guaranteed right to a speedy disposition of cases (administrative), 1
we thus resolve to consolidate2 the following.

In the case at bar, the address of two (2) Liquefied Petroleum Gas (LPG) establishments
BEL STAR GAS STATION / BEL STAR CYCLE PARTS & GENERAL MERCHANDISE, albeit
with the same owner/operator – FELIPE M. CAINGAT, is similarly located at Nautical Hiway
Corner P. Maliwanag Street, Poblacion, Mansalay, Oriental Mindoro.

BEL STAR GAS STATION

In an Order issued by this Office3, pursuant to an inspection conducted by the Oil

Industry Management Bureau (OIMB) of the Department of Energy (DOE) by virtue of Special
Assignment No. 2017-02-0025 dated February 27, 2017, respondent BEL STAR GAS STATION
and/or FELIPE M. CAINGAT was directed to:

1) Pay the total administrative fine of SIXTY THOUSAND PESOS (₱60,000.00) for violating a
provision of Department Circular (DC) No. 2014-01-0001, otherwise known as the “LPG Industry
Rules,” in engaging in the LPG business without the necessary Standards Compliance Certificate
(SCC);

2) Submit proof of compliance in relation to the Weighing Scale Device requirement for
violating the Implementing Rules and Regulations of Batas Pambansa Blg. 33, as
amended; and

3) Cease and desist from operating his retail outlet and selling LPG products to the public
until he acquires the necessary SCC from the DOE.

1 Section 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial,
or administrative bodies. (Article 3, 1987 Constitution)
2 Section 1. Consolidation. — When actions involving a common question of law or fact are pending before the
court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions
consolidated, and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs
or delay. (Rule 31, Consolidation or Severance, Rules of Court)
3 dated April 16, 2018, docketed as OLS Case No. 2018-RO-0220.
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 On June 7, 2018, in a Memorandum4 forwarded by the Oil Industry Management Bureau
(OIMB) to the Office of the Legal Services (OLS) for further evaluation, the latter was in receipt
of a letter-explanation dated May 31, 2018 from respondent Felipe M. Caingat as
owner/representative, which this Office treated as a Motion for Reconsideration (MR).

In its/his letter-explanation, respondent requests that “the administrative fine and the
outstanding request for SCC be cancelled,” significant section of which provides:

“Please be informed that Bel Star Gas Station has ceased and desisted from operating
the retail outlet and selling LPG products to the public since March 24, 2018 (right after
inspection on March 23, 2018) due to high cost of capitalization and minimal mark-up per
cylinder and a very slow turn out of sales (the station can sell 5-6 cylinders only a month).”

Notwithstanding the above, the same Memorandum however indicates the following
relevant information, to wit:

“Please be informed that on April 11, 2018 the same establishment was
inspected and was found selling LPG (Gasul) without the required Standards Compliance
Certificate (SCC).” (emphasis supplied)

BEL STAR CYCLE PARTS & GENERAL MERCHANDISE

Pursuant to Special Assignment No. 2018-04-0053 dated April 5, 2018, inspectors from
the OIMB of the DOE proceeded on April 11, 2018 for routine inspection purposes to the
business premises of BEL STAR CYCLE PARTS & GENERAL MERCHANDISE, an LPG retail
outlet, owned and operated by FELIPE M. CAINGAT, located at Nautical Hiway Corner P.
Maliwanag Street, Poblacion, Mansalay, Oriental Mindoro.

The Inspection/Investigation Report (IIR)5 revealed the following violation:

 Engaging in the LPG business without the necessary Standards Compliance Certificate
(SCC), in violation of Section 4, Rule II in relation to Section 24a, Rule VIII (Illegal Trading)
under DC No. 2014-01-0001 otherwise known as the “LPG Industry Rules:

“Section 4. Requirement to Secure a Standards Compliance Certificate (SCC). No person shall

engage in any Industry Activity without a valid Standards Compliance Certificate.

The DOE, through the Oil Industry Management Bureau (OIMB), shall issue a Standards
Compliance Certificate (SCC) upon the complete submission of and full compliance with the
requirements provided in Section 6 of this Circular. The OIMB shall have the authority to verify,
validate, authenticate and inspect all documents and information required from, given by or
obtained from such person for compliance with all applicable laws, rules and regulations.

A provisional SCC may be issued to a new LPG Industry Participant solely for the purpose of
obtaining a mayor’s/business permit: Provided, That an authenticated copy of the
mayor’s/business permit is submitted to the OIMB within 30 days from issuance of the
provisional SCC; otherwise, the latter shall be deemed automatically revoked.”

“Section 24. Illegal Trading. The following shall constitute Illegal Trading:

a. Engaging in business without SCC, where an LPG Industry Participant engages in

business without securing a SCC from the DOE; xxx.”

Respondent through its/his representative, Ms. Nerissa Lilang, acknowledged the said
report by affixing her signature and was accordingly furnished a copy, which contains a
directive for respondent to submit within ten (10) days from said inspection a WRITTEN
4 Memorandum dated June 5, 2018 RE Response to the OLS Order docketed May 7, 2018.
5 Copy enclosed.
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EXPLANATION under oath why no administrative and/or criminal action should be instituted
against it/him for the commission of the aforementioned violation.

After careful evaluation of the IIR, this Office hereby finds BEL STAR CYCLE PARTS &
GENERAL and/or FELIPE M. CAINGAT to have indeed committed the aforementioned
violation as reported and imposes upon him the following administrative penalty pursuant to
DC No. 2014-01-0001 or the LPG Industry Rules:

 For illegal trading, for engaging in a LPG industry activity WITHOUT A VALID SCC, an
administrative fine of SIXTY THOUSAND PESOS (₱60,000.00) under Section 30b, Rule IX:

“Any LPG Industry Participant engaging in any LPG industry activity without a valid SCC shall
be penalized with an administrative fine of ₱60,000.00.”

OUR RULING

It would be logical to assume that respondent’s MR is in response to the Order dated

April 16, 2018 (OLS Case No. 2018-RO-0220). Thus, despite respondent’s claim that it “has ceased
and desisted from operating the retail outlet and selling LPG products to the public since March 24, 2018
(right after inspection on March 23, 2018),” the recent inspection conducted on April 11, 2018,
confirms otherwise.

Moreover, assuming that respondent committed a typographical error relative to the

date in its claim – March 23, 2017 instead of March 23, 2018, it would still be taken against
respondent a fortiori or even more since it would show that respondent has been engaged in the
LPG business for much a longer time despite a cease and desist directive.

Hence, considering the previous and present SCC violations of respondent, these
demonstrated an open defiance and disregard to government rules governing the LPG industry
as the cease and desist directive under OLS Case No. 2018-RO-0220 went unheeded, in which
up until today respondent never took actions or steps to apply for an SCC, and is still engaging
in the LPG business. It must be emphasized that the oil industry, i.e. LPG business is impressed
with public interest. Thus, respondent has the obligation to be aware of and to comply strictly
with the laws, rules and regulations governing its/his business. Ergo, based on the foregoing,
we find respondent’s averments contained in its/his MR bereft of merit.

WHEREFORE, respondent is hereby DIRECTED to:

A. PAY the total administrative fine of SIXTY THOUSAND PESOS (₱60,000.00)

within thirty (30) days from receipt of this Order, either in cash, postal money order, or
manager’s check with the DEPARTMENT OF ENERGY as payee. Payment should be personally
brought, made or sent, together with a copy of this Order, to the:

DEPARTMENT OF ENERGY
Administrative Services
c/o TREASURY DIVISION
Energy Center, Rizal Drive
Bonifacio Global City, Taguig City.

B. CEASE AND DESIST from operating its/his retail outlet and selling LPG
products to the public until it/he acquires the necessary SCC from the DOE and comply with the
other directives, including payment of administrative fine.

Page 3 of 4
 A thorough review of the case reveals that respondent BEL STAR GAS STATION / BEL
STAR CYCLE PARTS & GENERAL MERCHANDISE and/or FELIPE M. CAINGAT has been
operating its/his/ LPG establishment without the necessary SCC pursuant to the provisions 6 of
DC No. 2014-01-0001 since March 23, 2017.

In this regard, for due process purposes, respondent has been afforded numerous
opportunities in the span of one (1) year, to apply for an SCC through the Show Cause Order
contained in the IIR furnished to respondent on March 23, 2017, and again to apply/comply
with the directives in securing the same under the Order dated April 16, 2018, notwithstanding
the penalty imposed therein.

Premises considered, this Office is left without any other recourse but to recommend 7 to
the Office of the Mayor, the suspension or revocation and termination of the business permit of
BEL STAR GAS STATION / BEL STAR CYCLE PARTS & GENERAL MERCHANDISE, in
line with the powers8 conferred by Republic Act No. 7160 or the “Local Government Code of the
Philippines.”

A copy recommending business closure will be sent to the Office of the Mayor of the
Municipality of Mansalay, Oriental Mindoro accordingly, including a copy of this Resolution as
an attachment.

This Resolution shall be without prejudice to the filing by the DOE of an appropriate
criminal action against the respondent if warranted pursuant to Batas Pambansa Blg. 33, as
amended, Republic Act No. 8479 and their respective implementing rules and regulations. 9

SO ORDERED.

Bonifacio Global City, Taguig, Metro Manila ______________________.

For and by authority of the Secretary:

ATTY. ARTHUS T. TENAZAS

Director, Legal Services

6 Section 4, Rule II in relation to Section 24a, Rule VIII (Illegal Trading).

7 Republic Act No. 8479 also known as "An Act Deregulating the Downstream Oil Industry and for Other Purposes.
Section 15. Additional Powers of the DOE Secretary. – In connection with the enforcement of this Act, the DOE
Secretary shall have the following powers:
xxx
(e) To recommend to the proper government agency the suspension or revocation and termination of the
business permit of an offender;
8 SEC. 455. Chief Executive; Powers, Duties and Compensation. - (a) The city mayor, as chief executive of the city
government, shall exercise such powers and perform such duties and functions as provided by this Code and other
laws. xxx
(3) xxx
(iv) Issue licenses and permits and suspend or revoke the same for any violation of the conditions upon
which said licenses or permits had been issued, pursuant to law or ordinance; xxx.
9 DC No. 98-03-004 and Rules and Regulations on the Implementation of Batas Pambansa Blg. 33, as amended by
Presidential Decree No. 1865.
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