Francisco Tatad vs Secretary of Energy

written by Howard

G.R. No. 124360 – 281 SCRA 330 – Political Law – Constitutional Law – The Legislative Department – Legislative Powers; Lawmaking Power – One Title One Subject Rule – Oil Deregulation Law

Considering that oil is not endemic to this country, history shows that the government has always been finding ways to alleviate the oil industry. The government created laws to accommodate these innovations in the oil industry. One such law is the Downstream Oil Deregulation Act of 1996 or RA 8180. This law allows that “any person or entity may import or purchase any quantity of crude oil and petroleum products from a foreign or domestic source, lease or own and operate refineries and other downstream oil facilities and market such crude oil or use the same for his own requirement,” subject only to monitoring by the Department of Energy. Tatad assails the constitutionality of the law. He claims that section 5 (b) of R.A. No. 8180 violates the one title one subject rule of Sec 26, Art 6 of the Constitution. Section 5 (b) of RA 8180 provides:

Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty shall be imposed and collected on imported crude oil at the rate of three percent (3%) and imported refined petroleum products at the rate of seven percent (7%), except fuel oil and LPG, the rate for which shall be the same as that for imported crude oil: Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall be the same: Provided, further, That this provision may be amended only by an Act of Congress.

The inclusion of the tariff provision in section 5(b) of R.A. No. 8180 violates Section 26(1) Article VI of the Constitution requiring every law to have only one subject which shall be expressed in its title. Tatad contends that the imposition of tariff rates in section 5(b) of R.A. No. 8180 is foreign to the subject of the law which is the deregulation of the downstream oil industry.

ISSUE: Whether or not RA 8180 is constitutional.

HELD: The SC declared the unconstitutionality of RA 8180 not because it violated the one title one subject rule but rather because it violated Sec 19 of Art 12 of the Constitution. It violated that provision because it only strengthens oligopoly which is contrary to free competition. The SC emphasized that the provision of Sec 5 (b) of RA 8180 does not violate the one title one subject rule. The SC, as a policy, has adopted a liberal construction of the one title – one subject rule.  The SC also emphasized that the title need not mirror, fully index or catalogue all contents and minute details of a law. A law having a single general subject indicated in the title may contain any number of provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying out the general subject. The SC held that section 5(b) providing for tariff differential is germane to the subject of RA 8180 which is the deregulation of the downstream oil industry. The section is supposed to sway prospective investors to put up refineries in our country and make them rely less on imported petroleum.

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