Philippine Institute of Petroleum, Inc. vs. Department of Energy

A writ of preliminary injunction cannot issue to restrain the DOE from enforcing DC2019-05-0008 because the circular's prior-notice and reportorial requirements are valid exercises of the DOE's monitoring powers under RA 8479 and do not amount to price control or a clear invasion of oil companies' rights.

Philippine Institute of Petroleum, Inc. (PIP) is an association of businesses operating in the downstream oil industry, while Isla LPG Corporation, PTT Philippines Corporation, and Total (Philippines) Corporation are companies engaged in the petroleum products business. The Department of Energy (DOE) is the government agency tasked with implementing Republic Act No. 8479, the Downstream Oil Industry Deregulation Act of 1998, which liberalized and deregulated the downstream oil industry. Section 14 of RA 8479 authorizes the DOE to monitor and publish daily international crude oil prices and to follow domestic oil price movements, while Section 15 grants the DOE Secretary additional powers to gather information and require reports. Pursuant to these provisions, the DOE issued Department Circular No. DC2019-05-0008, the Revised Guidelines for the Monitoring of Prices in the Sale of Petroleum Products by the Downstream Oil Industry in the Philippines, requiring oil companies to submit reports to the Oil Industry Management Bureau.

On February 10, 1998, Republic Act No. 8479, the Downstream Oil Industry Deregulation Act of 1998, was approved to liberalize and deregulate the downstream oil industry. Section 14 authorized the DOE to monitor and publish daily international crude oil prices and to follow domestic oil price movements, while Section 15 granted the DOE Secretary additional powers to gather information and require reports. Pursuant to RA 8479, the DOE issued Department Circular No. DC2019-05-0008, the Revised Guidelines for the Monitoring of Prices in the Sale of Petroleum Products by the Downstream Oil Industry in the Philippines, which required oil companies to submit a report to the Oil Industry Management Bureau containing a detailed computation with explanation and supporting documents on unbundled items comprising the Oil Company Price, in the prescribed format.

On June 21, 2019, PIP, an association of businesses operating in the downstream oil industry, together with Isla, PTT, and TPC, companies engaged in the business of petroleum products, filed a Petition for Declaratory Relief with Application for Temporary Restraining Order and Writ of Preliminary Injunction before the RTC of Makati City, Branch 58. They alleged that DC2019-05-0008 violated their rights and was contrary to RA 8479 because (1) Articles II, IV, and V were forms of price control contrary to the policy of full deregulation; (2) Articles II, IV, and V imposed impossible requirements; (3) Articles II, IV, and V did not find support in RA 8479, particularly its anti-trust provisions, with the passage of RA 10667; and (4) the circular affected their right to a truly competitive market and their right against disclosure of trade secrets and/or privileged or confidential information. They claimed that DC2019-05-0008 was an ultra vires act of the DOE and prayed that it be declared invalid in its entirety, with a temporary restraining order and writ of preliminary injunction against the DOE.

The RTC conducted the hearing on the application for a temporary restraining order on June 27, 2019. In its Order dated June 28, 2019, the RTC granted the application and ordered the DOE not to enforce DC2019-05-0008 for 20 days from issuance. On July 12, 2019, PIP et al. filed an Amended Petition for Declaratory Relief with Application for Temporary Restraining Order and Writ of Preliminary Injunction. On July 15, 2019, the RTC heard the application for the issuance of a writ of preliminary injunction. During that hearing, PIP et al.'s witness admitted that DC2019-05-0008 had no ceiling, no price lower limit, no specific price to sell oil, and no constant number to be used by oil companies; the witness also admitted that the purported price-fixing was only a possibility.

In its Resolution dated August 14, 2019, the RTC found all requisites present and granted PIP et al.'s prayer for a writ of preliminary injunction, enjoining the DOE from implementing and enforcing DC2019-05-0008 until the main petition was decided, upon posting of a bond of PHP 500,000.00. The DOE moved for reconsideration, but the RTC denied it in its Order dated December 3, 2019. The DOE then filed a Petition for Certiorari before the CA, alleging grave abuse of discretion for the RTC's failure to dismiss the case despite litis pendentia and forum shopping and for issuing the writ without basis.

The CA, in its Decision dated October 3, 2022, partly granted the petition. It reversed and set aside the RTC's Resolution and Order only insofar as they granted the writ of preliminary injunction, but retained the order for non-dismissal of the main case for failure to establish forum shopping and litis pendentia. The CA found no identity of parties and no basis for the injunction, holding that there was no clear right to be violated because DC2019-05-0008 did not impose price control nor dictate market prices, and that the alleged damage was more imagined than real. Both PIP et al. and the DOE filed Motions for Partial Reconsideration, which the CA denied in its Resolution dated March 3, 2023. PIP et al. then filed the instant Petition for Review on Certiorari, agreeing with the non-dismissal but insisting that the CA erred in reversing the writ of preliminary injunction.

• Grave Error in Reversing Injunction: Petitioners maintained that the CA erred in reversing and setting aside the RTC's issuance of a writ of preliminary injunction despite the presence of all requisites.
• Full Deregulation and Price Control: Petitioners argued that DC2019-05-0008 violates RA 8479's policy of full deregulation because Articles II, IV, and V are forms of price control; Article II, Section 3 requires prior notice of price adjustment; Article II, Section 4 fixes prices for a week for liquid fuels and for a month for LPG; Articles IV and V, Section 8 require submission of cost components and profit margin; Article V, Section 9 imposes reportorial requirements on LPG outlets, refillers, and dealers; and Article VI imposes stiff penalties for non-compliance.
• Impossible Requirements and Lack of Statutory Basis: Petitioners claimed that the circular imposes impossible requirements on oil companies and other related parties and lacks support in RA 8479, particularly with respect to its anti-trust provisions, with the passage of RA 10667.
• Trade Secrets and Confidential Information: Petitioners asserted that the circular affects their right to a truly competitive market and their right against disclosure of trade secrets and/or privileged or confidential information; unbundling price components would expose them to competitors and cause loss of competitive advantage.
• Irreparable Injury: Petitioners argued that there is an urgent and paramount necessity for injunctive relief because of the irreparable damage they and other oil industry entities would incur from the circular's violation of their rights.
• Non-Dismissal: Petitioners agreed with the CA's ruling that the case should not be dismissed for forum shopping and litis pendentia.

• No Basis for Injunction: Respondent DOE argued before the CA that the RTC committed grave abuse of discretion in issuing the writ of preliminary injunction because there was no basis for it; the CA sustained this, finding no clear right and no price control.
• Monitoring Authority and No Price Control: Respondent maintained that DC2019-05-0008 does not impose price control nor dictate market prices; it merely implements the DOE's monitoring powers under RA 8479.
• Necessity of Sanctions: Respondent pointed out, through the Office of the Solicitor General, that without sanctions, oil companies would simply treat the circular as a useless piece of paper.
• Forum Shopping and Litis Pendentia: Respondent alleged before the CA that the RTC should have dismissed the case for litis pendentia and deliberate forum shopping, but the CA found these not established.

• Grave Error in Reversing Injunction: Whether the Court of Appeals committed grave error in reversing and setting aside the RTC's issuance of a writ of preliminary injunction.
• Clear and Unmistakable Right: Whether PIP et al. had a clear and unmistakable right to be protected against the implementation of DC2019-05-0008.
• Material and Substantial Invasion: Whether DC2019-05-0008 materially and substantially invaded PIP et al.'s rights.
• Urgent Need to Prevent Irreparable Injury: Whether there was an urgent need for the writ to prevent irreparable injury to PIP et al.

• Grave Error in Reversing Injunction: No. The CA correctly reversed and set aside the RTC's writ of preliminary injunction because the requisites for its issuance were not met.
• Clear and Unmistakable Right: No. RA 8479 expressly grants the DOE monitoring powers and authority to require reports; DC2019-05-0008 was issued pursuant to those powers, so PIP et al. had no clear legal right against its implementation.
• Material and Substantial Invasion: No. The assailed provisions do not mandate, fix, or set restrictions on prices; they merely require prior notice and submission of reports, with penalties to ensure compliance.
• Urgent Need to Prevent Irreparable Injury: No. Absent a clear legal right and substantial invasion, there can be no irreparable injury to speak of; the alleged damage was more imagined than real.

• Grave Error in Reversing Injunction: A writ of preliminary injunction is a preservative remedy for the protection of substantial rights and interests, not a cause of action itself, and its purpose is to preserve the status quo until the merits are heard. Under Rule 58, Section 1 of the Rules of Court, it may be granted when the applicant is entitled to the relief demanded, when the act complained of would probably work injustice, or when a party is doing or threatening acts in violation of the applicant's rights tending to render judgment ineffectual. The requisites are: (a) a clear and unmistakable right in esse; (b) material and substantial invasion of that right; (c) urgent need to prevent irreparable injury; and (d) no other ordinary, speedy, and adequate remedy. The Court found that none of these requisites were met, so the CA did not commit grave error in reversing the injunction.
• Clear and Unmistakable Right: In Sumifru (Philippines) Corp. vs. Spouses Cereño, a clear and unmistakable right is an actual and existing substantial right founded on law or enforceable as a matter of law; it cannot be contingent, abstract, or future, and a doubtful or disputed right is not clear. PIP et al. anchored their claim on RA 8479, Section 2, which declares the policy of full deregulation. The Court did not dispute that policy, citing Garcia vs. Corona, Garcia vs. Executive Secretary, and Tatad vs. Secretary of the Department of Energy, but held that deregulation does not leave the industry without supervision. RA 8479, Sections 5 and 7 provide measures for liberalization and fair trade, while Sections 14 and 15 expressly grant the DOE and the DOE Secretary monitoring powers, including the power to require reports in such form as the Secretary may prescribe. DC2019-05-0008 was issued pursuant to these powers. PIP et al. themselves conceded that the DOE has monitoring powers under RA 8479. Thus, they had no clear legal right against the implementation of the circular.
• Material and Substantial Invasion: PIP et al. claimed that the circular imposed price control through Article II, Sections 3 and 4; Article IV and Article V, Section 8; Article V, Section 9; and Article VI. The Court examined each provision and found that Article II, Section 3 merely requires oil companies to notify the DOE of any price adjustment or no adjustment; Article II, Section 4 simply suggests the implementation day for liquid fuel and LPG; Article IV, Section 7 and Article V, Section 8 require a formal notice and report on unbundled price components; Article V, Section 9 imposes a reportorial requirement on liquid fuel retail outlets, LPG refillers, and LPG dealers; and Article VI, Section 11 provides penalties for non-compliance, which finds basis in RA 8479. None of these provisions mandate, fix, or set restrictions on prices. PIP et al.'s own witness admitted that the circular had no ceiling, no lower limit, no specific price, and no constant number, and that price-fixing was only a possibility. Compliance was not impossible, even if difficult or tedious. The claim that the data were trade secrets was unsubstantiated; the information pertained to costs, taxes, and charges, and there was no proof that its submission would unduly affect competition. DC2019-05-0008, Section 12 limits the release of data, and RA 8479, Section 15(g), Executive Order No. 2, Series of 2016, Section 4, and the DOE People's Freedom of Information Manual, Section 1(5)(c) recognize exceptions for trade secrets and confidential information. Thus, there was no material or substantial invasion of rights.
• Urgent Need to Prevent Irreparable Injury: A writ of preliminary injunction should issue only to prevent grave and irreparable injury, meaning injury that is actual, substantial, and demonstrable, with no standard by which its amount can be measured with reasonable accuracy. Since PIP et al. failed to establish a clear legal right and a material or substantial invasion, there was no irreparable injury to speak of. The CA correctly found that the alleged damage was more imagined than real, based on bare allegations and an unclear source of right. The possibility of irreparable damage without proof of an actual existing right is not a ground for a preliminary injunction. Therefore, there was no urgent need for the writ.

• Requisites of a Writ of Preliminary Injunction — A writ of preliminary injunction is a preservative remedy adjunct to a main suit, aimed at preserving the status quo until the merits are heard. It requires: (a) a clear and unmistakable right in esse; (b) material and substantial invasion of that right; (c) urgent need to prevent irreparable injury; and (d) no other ordinary, speedy, and adequate remedy. Applied: PIP et al. failed all requisites.
• Clear and Unmistakable Right — A right protected by injunction must be an actual and existing substantial right, founded on law or enforceable as a matter of law; it cannot be contingent, abstract, or future, and a doubtful or disputed right is not clear. Applied: RA 8479 grants the DOE monitoring powers, so PIP et al. had no clear right against DC2019-05-0008.
• Deregulation Does Not Mean Absence of Supervision — Full deregulation under RA 8479 does not leave the downstream oil industry without supervision; the State may monitor, require reports, and prevent unfair competition. Applied: DC2019-05-0008 is a valid monitoring measure.
• Price Control vs. Monitoring and Reportorial Requirements — Measures that merely require prior notice, reporting, unbundled price computations, and penalties for non-compliance are not price control where they do not mandate, fix, or set restrictions on prices. Applied: the assailed DC provisions are monitoring and reportorial requirements.
• Trade Secrets and Confidential Information — The party alleging that information constitutes trade secrets or confidential commercial or financial information bears the burden of proof; mere allegation is not proof. RA 8479, Section 15(g), Executive Order No. 2, Series of 2016, and the DOE People's Freedom of Information Manual recognize exceptions and prohibit unauthorized disclosure. Applied: PIP et al. failed to prove trade secrets or undue competitive harm.
• Irreparable Injury — Irreparable injury must be actual, substantial, and demonstrable, with no standard by which its amount can be measured. Absent a legal right, there can be no irreparable injury. Applied: no urgent need for the writ existed.

• "A writ of preliminary injunction is a preservative remedy for the protection of substantial rights and interests. It is not a cause of action itself, but a mere provisional remedy adjunct to a main suit. The purpose of injunction is to prevent threatened or continuous irremediable injury to the parties before their claims can be thoroughly studied, and its sole aim is to preserve the status quo until the merits of the case are fully heard." — This passage defines the nature and purpose of a writ of preliminary injunction, framing the Court's analysis of why the remedy is merely provisional and preservative.
• "To be entitled to the issuance of an injunctive writ, the following requisites must be present: (a) the applicant must have a clear and unmistakable right to be protected, that is a right in esse; (b) there is a material and substantial invasion of such right; (c) there is an urgent need for the writ to prevent irreparable injury to the applicant; and, (d) no other ordinary, speedy, and adequate remedy exist to prevent the infliction of irreparable injury." — This is the canonical formulation of the requisites for a writ of preliminary injunction applied by the Court in denying injunctive relief.
• "A plain reading of these provisions would readily show that it is pursuant to these powers and functions that the assailed DC2019-05-0008 was issued. Republic Act No. 8479 is clear in allowing the DOE and the DOE Secretary to require the oil companies to submit a detailed report on the petroleum products, in such form as the Secretary may prescribe, in order for the DOE to fulfill its mandated duty of monitoring and publishing daily international crude oil prices, as well as following the movement of domestic oil prices." — This passage states the ratio decidendi on the DOE's authority to issue the assailed circular and to require reportorial compliance.
• "As gleaned from the foregoing, it is implausible that these provisions can be construed as forms of price control. They neither mandate, fix, nor set restrictions on the prices for such petroleum products. They simply require oil companies to give notice and submit reports to the DOE, which is authorized under Republic Act No. 8479. Meanwhile, the penal sanctions are included to ensure the proper observance of such requirements." — This passage is the core holding that the assailed DC provisions are not price control and therefore do not substantially invade the petitioners' rights.

• Sumifru (Philippines) Corp. vs. Spouses Cereño, 825 Phil. 743 (2018) — Cited for the definition of a clear and unmistakable right; a right protected by injunction must be actual and existing, not contingent or doubtful.
• Bureau of Customs vs. Court of Appeals, G.R. No. 192809, April 26, 2021 — Cited for the requisites of a writ of preliminary injunction and the rule that irreparable injury must be actual, substantial, and demonstrable.
• Tatad vs. Secretary of the Department of Energy, 346 Phil. 321 (1997) — Cited to explain that the free enterprise system is not pure and unadulterated competition and that the State may proscribe combinations in restraint of trade and unfair competition; deregulation does not mean a strict hands-off policy.
• Garcia vs. Corona, 378 Phil. 848 (1999) — Cited to emphasize the paramount significance and complexity of downstream oil industry deregulation and its impact on the economy and public welfare.
• Garcia vs. Executive Secretary, 602 Phil. 64 (2009) — Cited to uphold Congress's legislative determination that liberalizing the oil market is a lawful exercise of its prerogative, which the Court must respect.
• Franco vs. Energy Regulatory Commission, 783 Phil. 740 (2016) — Cited by PIP et al. for the policy of full deregulation and prohibition of government interference with market aspects of the oil industry; the Court did not dispute the policy but held it did not create a clear right against the DOE's monitoring powers.
• Philippine Charity Sweepstakes Office vs. TMA Group of Companies, 860 Phil. 522 (2019) — Cited for the rule that a writ of preliminary injunction should issue only to prevent grave and irreparable injury.

• Republic Act No. 8479, Section 2 — Declaration of policy: liberalize and deregulate the downstream oil industry to ensure a truly competitive market under fair prices, adequate supply, and environmentally clean and high quality petroleum products; the State shall promote entry of new participants. PIP et al. relied on this for full deregulation; the Court held it did not create a clear right against DOE monitoring.
• Republic Act No. 8479, Section 5 — Liberalization of the Industry: any person may import or purchase crude oil and petroleum products, lease or own and operate refineries, and market products, provided prior notice to the DOE for monitoring purposes and report every importation or exportation. Cited to show deregulation is subject to monitoring.
• Republic Act No. 8479, Section 7 — Promotion of Fair Trade Practices: DTI and DOE shall take measures to promote fair trade and prevent cartelization, monopolies, combinations in restraint of trade, and unfair competition; the DOE shall monitor relationships between oil companies and dealers, haulers, and LPG distributors, and conciliate or arbitrate disputes. Cited to show the DOE's regulatory role.
• Republic Act No. 8479, Section 14 — Monitoring: the DOE shall monitor and publish daily international crude oil prices and follow domestic oil price movements; maintain inventory; require importers, refiners, and marketers to submit monthly importations, purchases, sales or consumption, and inventory; and act on reports of unreasonable price rises. Cited as basis for DC2019-05-0008.
• Republic Act No. 8479, Section 15 — Additional Powers of the DOE Secretary: gather and compile information, investigate, require annual or special reports or answers, make public portions of information in the public interest, but no authority to make public trade secrets or privileged or confidential commercial or financial information, except to law enforcement. Cited to uphold reportorial requirements and limit disclosure.
• Rule 58, Section 1, Rules of Court — A preliminary injunction may be granted at any stage prior to judgment or final order, requiring a party, court, agency, or person to refrain from particular acts or perform acts; grounds include entitlement to relief, injustice during litigation, and acts violating rights tending to render judgment ineffectual. Cited as the procedural basis for the remedy.
• Department Circular No. DC2019-05-0008, Article II, Sections 3 and 4; Article IV, Section 7; Article V, Sections 8 and 9; Article VI, Section 11; Section 12 — The assailed provisions require prior notice of price adjustment or no adjustment, suggest an implementation day, require formal notice and reports on unbundled price components, impose reportorial requirements on LPG outlets, refillers, and dealers, provide penalties for non-compliance, and limit release of data. The Court held they are not price control and are authorized by RA 8479.
• Executive Order No. 2, Series of 2016, Section 4 — Access to information shall be denied when the information falls under exceptions in the Constitution, existing law, or jurisprudence. Cited with DC Section 12 to show confidentiality safeguards.
• DOE People's Freedom of Information Manual, Section 1(5)(c) — Lists exceptions to access, including trade secrets, intellectual property, business, commercial, financial, and proprietary information, and confidential information known to public officers. Cited to show the circular recognizes confidential data.

Gesmundo, C.J. (Chairperson), Zalameda, Rosario, and Marquez, JJ., concur.