DOE Releases Guidelines on the Registration and Issuance of LTO to Qualified DOE-Regulated LPG Industry Participants

On 22 November 2022, the Department of Energy (“DOE”) issued Department Circular No. 2022-11-0037 (“Department Circular”) prescribing rules and regulations on the registration and issuance of a license to operate (“LTO”) to qualified DOE-Regulated liquefied petroleum gas (“LPG”) Industry participants. The Department Circular also includes penalties for certain prohibited acts. The Department Circular was issued pursuant to Republic Act No. 11592, otherwise known as the LPG Industry Regulation Act and its Implementing Rules and Regulations. It prescribes the rules for the registration and reportorial requirements for DOE-Regulated LPG industry participants, which term includes Importer, Refiner, Bulk Distributor, Terminal and/or Depot owner/lessor, Hauler, Refiller, Trademark owner or Marketer, Dealer, Retailer, Auto-LPG Dispensing Station owner/operator, and Centralized LPG Piping System owner/operator. Some of the pertinent provisions are discussed below.

Issuance of License to Operate

The performance by DOE-regulated LGP industry participants of specific Activities require the issuance of an LTO. For the purposes of obtaining an LTO, the term Activity shall refer to importing, refining, storing, exporting, refilling, transportation, distribution, and marketing of LPG for residential, commercial, industrial, or automotive use; as well as the importing, manufacturing, distribution, selling, requalifying, repairing, and scrappage of LPG Pressure Vessels, authorized LPG Seals, and other ancillary equipment.

The LTO issued will be for the performance of a specific Activity, and shall be specific to the site, plant, or outlet. The LTO must be obtained prior to the commencement of commercial operations and shall be publicly posted in its business establishment or premises. In the event that the DOE-regulated LPG industry participant intends to engage in a new Activity outside of its current LTO, it shall secure another for such new Activity. Each LTO shall be valid and renewable every 5 years unless earlier revoked for a cause. Meanwhile, DOE-regulated LPG industry participants already engaged in any Activity, at the time of the effectivity of the Department Circular, must obtain an LTO within 6 months from its effectivity.

The requirements for the application for an LTO vary depending on the type of DOE-regulated LPG industry participant and may be found in the annexes of the Department Circular.

Issuance of Certificate of Registration

Meanwhile, certain acts not included in the term Activity, also require prior registration with the DOE. Namely, the construction of LPG facilities, the use of an LPG Trademark or Trade Name, re-filling and retail authorizations in relation to LPG-filled cylinders bearing a Trademark or Trade Name and the use of an LPG Seal, among others. 

No natural or juridical person shall commence the construction of a Refinery, Terminal and/or Depot, Refilling Plant, and Centralized LPG piping system including any of their ancillary facilities without first securing a registration with the DOE through the Oil Industry Management Bureau (“OIMB”) or DOE Field Office (“FO”). The OIMB or FO shall have the authority to verify and validate all the required documents and information and may further require a presentation regarding the proposed construction from the applicant in a pre-application conference. The certified true copy of the following supporting documentary requirements must be submitted:

1. Company profile;
2. Certificate of Registration from the Securities and Exchange Commission (“SEC”) or the Department of Industry (“DTI”), whichever is applicable;
3. Articles of Incorporation (SEC) or its equivalent (DTI);
4. General Information Sheet (SEC) or its equivalent (DTI);
5. Executive briefer of the facility for construction;
6. Site and facility layout plan with sufficient description and legends;
7. List of reference standards/codes used in the construction design; and
8. Notarized company secretary’s certificate of the authorized representative of the applicant.

A Refiller is also required to register with the DOE, through OIMB or FO, all third-party Trademark or Trade Name it is authorized to fill per refilling plant upon application for the issuance of LTO and any additional third-party Trademark or Trade Name it is authorized to fill after the issuance of the LTO. Similarly, a Dealer or Retailer shall register with the DOE, through OIMB or FO, all Trademark or Trade Name it is authorized to sell via LPG-filled Pressure Vessel upon application for the issuance of LTO and any additional Trademark or Trade Name it is authorized to sell after the issuance of the LTO.

Further, no natural or juridical person shall be authorized to own, sell, and/or commercially use an LPG Seal if not domestically manufactured or imported by a DTI duly accredited LPG Seal manufacturer or importer. Trademark Owners or Marketers shall likewise register all LPG Seal including their manufacturer/s or importer/s with the DOE through the OIMB prior to their commercial use.

Penalties

Engaging in an Activity without a valid LTO or registration from the DOE may result in the imposition of an administrative fine ranging from PHP5,000.00 to PHP20,000.00 for each day of operation without the required LTO or certificate of registration, depending on the frequency of the commission of the said offense. The specific penalties prescribed based on the prohibited act committed are listed in Annex L of the Department Circular.
The full text of Department Circular No. 2022-11-0037 together with its Annexes may be accessed through this link.