G.R. No. 124360, November 5, 1997
FRANCISCO S. TATAD, petitioner, vs. THE SECRETARY OF THE DEPARTMENT OF ENERGY AND THE SECRETARY OF THE DEPARTMENT OF FINANCE, respondents.

G.R. No. 127867 November 5, 1997
EDCEL C. LAGMAN, JOKER P. ARROYO, ENRIQUE GARCIA, WIGBERTO TAÑADA, FLAG HUMAN RIGHTS FOUNDATION, INC., FREEDOM FROM DEBT COALITION (FDC), SANLAKAS, petitioners, vs. HON. RUBEN TORRES in his capacity as the Executive Secretary, HON. FRANCISCO VIRAY, in his capacity as the Secretary of Energy, CALTEX Philippines, Inc., PETRON Corporation and PILIPINAS SHELL Corporation, respondents.

FACTS

The consolidated petitions assail the constitutionality of certain provisions of Republic Act No. 8180, the Downstream Oil Deregulation Act of 1996. The specific provisions challenged are Section 5(b), which imposes a 3% tariff on imported crude oil and a 7% tariff on imported refined petroleum products, and Section 15, which authorizes the Department of Energy (DOE) to implement full deregulation by March 1997, timing it when world oil prices are declining and the peso-dollar exchange rate is stable. While G.R. No. 124360 was pending, President Ramos issued Executive Order No. 392 on January 22, 1997, declaring full deregulation effective February 8, 1997. Following this implementation, G.R. No. 127867 was filed. The petitioners include members of Congress, taxpayers, concerned citizens, and organizations (FLAG, FDC, Sanlakas). They argue the law fosters unfair competition, does not truly deregulate, and benefits an alleged cartel of three major oil companies.

ISSUE

The primary issues, as framed in the dissenting opinion, are: (1) whether the petitions raise a justiciable controversy or involve non-justiciable political questions regarding the wisdom of the law; (2) whether the petitioners have the necessary locus standi to file the suits; (3) whether Section 5(b) of R.A. No. 8180 violates the “one title-one subject” rule under the Constitution; and (4) whether the assailed provisions (Sections 5(b), 6, 9(b), and 15) are unconstitutional for fostering cartelization and unfair competition.

RULING

Justice Melo, in his dissenting opinion, voted for the outright dismissal of the consolidated petitions for lack of merit. His ruling on each issue is as follows:
1. The petitions do not raise a justiciable controversy. The petitioners’ contentions—that the tariff differential will not foster a competitive market and that the law controls rather than deregulates the industry—are policy matters within the wisdom of the legislative and executive branches. These constitute political questions beyond the scope of judicial inquiry.
2. The petitioners lack the necessary locus standi. Members of Congress cannot challenge the law as they have not shown it impairs their specific legislative rights or prerogatives, especially since the act is Congress’s own. Taxpayers and concerned citizens also lack standing as the petitions do not allege an unconstitutional exercise of Congress’s spending power or an illegal disbursement of public funds. The petitioners have not demonstrated a direct, personal, and substantial injury from the law’s enforcement.
3. Section 5(b) does not violate the “one title-one subject” rule. The imposition of tariff rates is a means to implement the deregulation of the downstream oil industry and is therefore germane to the law’s general subject as expressed in its title. The provision’s inclusion by the Bicameral Conference Committee, even if not in the original House or Senate versions, is valid as the amendment is germane to the bill’s subject, and both houses were informed of the changes through the Committee’s explanatory statement.
4. The assailed provisions are not unconstitutional. The tariff differential in Section 5(b) is a rational means to encourage investment in refineries. The inventory requirement in Section 6 ensures security of supply and benefits all serious industry players and the public. The prohibition against predatory pricing in Section 9(b) protects new players from established firms. The timing provision in Section 15 is a valid exercise of executive discretion to ensure a smooth transition. Any allegation of an existing cartel among the three major oil companies requires a factual determination that the Court is not positioned to make. The proper remedy for perceived defects in the law is through amendatory bills in Congress, not judicial nullification.