GR 99886; (March, 1993) (Digest)
G.R. No. 99886 , March 31, 1993
JOHN H. OSMEÑA, petitioner, vs. OSCAR ORBOS, in his capacity as Executive Secretary; JESUS ESTANISLAO, in his capacity as Secretary of Finance; WENCESLAO DELA PAZ, in his capacity as Head of the Office of Energy Affairs; REX V. TANTIONGCO, and the ENERGY REGULATORY BOARD, respondents.
FACTS
Petitioner John H. Osmeña sought remedies under Rule 65, challenging the Oil Price Stabilization Fund (OPSF) created under P.D. No. 1956, as amended. The OPSF was established to reimburse oil companies for cost increases due to exchange rate adjustments and world market price increases, and was later reclassified into a “trust liability account” by E.O. 1024. President Aquino further amended it via E.O. 137, expanding reimbursement grounds. As of March 31, 1991, the OPSF had a deficit of about P12.877 billion. To address this, the Energy Regulatory Board (ERB) issued an Order on December 10, 1990, approving an increase in pump prices. The petitioner alleged that the respondents were poised to accept and pay claims not authorized under the law.
The petitioner posited four grounds: (1) the invalidity of the “trust account” as contrary to Section 29(3), Article VI of the Constitution ; (2) the unconstitutionality of the delegation of legislative power to the ERB under P.D. No. 1956, as amended; (3) the illegality of reimbursements to oil companies paid from the OPSF, contravening the law; and (4) the consequent nullity of the December 10, 1990 ERB Order and the necessity of a price rollback.
ISSUE
1. Whether the creation and maintenance of the OPSF as a “trust fund” violates Section 29(3), Article VI of the Constitution .
2. Whether there is an undue delegation of legislative power to the Energy Regulatory Board.
3. Whether the reimbursements to oil companies, particularly for financing charges, are illegal.
4. Whether the ERB Order of December 10, 1990 is null and void, requiring a rollback of prices.
RULING
1. On the Constitutionality of the OPSF as a Trust Fund: The Supreme Court ruled that the OPSF is not a tax measure but a stabilization fund established under the police power of the State. Citing Valmonte v. Energy Regulatory Board, the Court held that the OPSF is a buffer mechanism to stabilize domestic oil prices and protect the economy from frequent price fluctuations. The funds are not taxes levied for a special purpose under the constitutional provision but are exactions primarily in the exercise of police power. Therefore, maintaining it as a “trust account” does not violate Section 29(3), Article VI of the Constitution .
2. On the Delegation of Legislative Power: The Court found no undue delegation of legislative power. The authority granted to the ERB is not taxation power but administrative implementation within the framework of the law. The law provides sufficient standards for the ERB to follow, such as “minimizing frequent price changes” and “stabilizing domestic pump prices.” The delegation is valid as it is circumscribed by specific limitations and guidelines.
3. On the Illegality of Reimbursements: The Court partially granted the petition on this point. It ruled that reimbursements for financing charges incurred by oil companies, as authorized under E.O. 137, are not permitted under P.D. No. 1956, as amended. Applying the principle of ejusdem generis, the phrase “other factors as may be determined by the Ministry of Finance” in the law must be interpreted in relation to the preceding specific items (exchange rate adjustments and world market price increases). Financing charges do not belong to the same category and thus are not allowable. Therefore, such reimbursements are illegal and void.
4. On the Nullity of the ERB Order and Price Rollback: The Court did not nullify the entire ERB Order of December 10, 1990. Since the OPSF mechanism itself was upheld as constitutional and the delegation was valid, the price increase order was not invalidated per se. The petition for a rollback was dismissed, except concerning the disallowed reimbursements for financing charges.
DISPOSITIVE PORTION:
The petition is GRANTED insofar as it prays for the nullification of the reimbursement of financing charges paid pursuant to E.O. 137, and DISMISSED in all other respects.