FACTS:

The petitioner in this case sought corrective and prohibitive remedies under Rule 65 of the Rules of Court. The petitioner claimed that the "trust account" created in the books of account of the Ministry of Energy (now, the Office of Energy Affairs) was invalid because it violated the Constitution. The petitioner also argued that the delegation of legislative power to the Energy Regulatory Board was unconstitutional. Additionally, the petitioner claimed that the reimbursements to oil companies paid out of the Oil Price Stabilization Fund were illegal. The petitioner further alleged that an Order issued on December 10, 1990, approving the increase in pump prices of petroleum products, was null and void and called for a rollback of prices. The creation of the trust fund was said to violate a provision of the Constitution regarding special funds. The petitioner also argued that the delegation of legislative authority to the Energy Regulatory Board violated another provision of the Constitution. The petitioner contended that the monies collected under P.D. No. 1956 should be treated as a special fund, not as a trust account or a trust fund. The petitioner claimed that a special fund, although limited to a special purpose, still belonged to the state. The petitioner further argued that the delegation of legislative authority should have specified quantitative limits on taxation.

The case involves a discussion about the nature and functions of the Oil Price Stabilization Fund (OPSF) established by Energy Regulatory Board. The OPSF is a "Trust Account" created to minimize frequent price changes brought about by exchange rate adjustment and changes in world market prices of crude oil and imported petroleum products. The OPSF can be funded from various sources including tax collections, tax exemptions of government corporations, and additional amounts imposed on petroleum products. The purpose of the OPSF is to stabilize and subsidize domestic prices of petroleum products and fuel oil, which is crucial due to the country's high dependence on imported crude oil. The OPSF acts as a buffer mechanism to stabilize domestic consumer prices, protect local consumers from adverse consequences, and allow oil companies to recover costs that would not otherwise be recovered given existing domestic prices. The establishment and maintenance of the OPSF is considered within the government's police power to secure the physical and economic survival and well-being of the community.

However, the Court disagreed with the petitioner's arguments.

ISSUES:

1. Whether the establishment and maintenance of the OPSF is within the scope of the government's police power.

2. Whether the OPSF can be considered a special fund and not a tax.

3. Whether the provision conferring authority to impose additional amounts on petroleum products constitutes an undue delegation of legislative power.

4. Whether or not the delegation of power to the Energy Regulatory Board (ERB) to impose additional imposts on petroleum products is valid and constitutional.

5. Whether or not the reimbursements to oil companies, paid out of the Oil Price Stabilization Fund (OPSF), are legally authorized.

6. Whether the overpayment refunds are prohibited by P. D. 1956.

7. Whether the remaining issue has been rendered moot and academic.

RULING:

1. The establishment and maintenance of the OPSF is within the scope of the government's police power. The stabilization and subsidy of domestic prices of petroleum products are considered public purposes that fall within the government's responsibility to secure the physical and economic survival and well-being of the community.

2. The OPSF can be considered a special fund. Although referred to as taxes, they are imposed in the exercise of the government's police power. The funds collected are considered state funds and are held for a special purpose, to be administered in trust and transferred to the general funds of the government once the purpose has been fulfilled or abandoned.

3. The provision conferring authority to impose additional amounts on petroleum products does not constitute an undue delegation of legislative power. The provision provides a sufficient standard for the authority to be exercised, as it is guided by the general policy of protecting the local consumer by stabilizing and subsidizing domestic pump rates. The need for flexibility and expediency in carrying out the objectives of the law, which fall under the police power of the State, justifies the absence of a specific quantitative restriction or limit on the authority to impose additional amounts.

4. The delegation of power to the ERB to impose additional imposts on petroleum products is valid and constitutional. The Court finds that the challenged law sets forth a determinable standard which guides the exercise of the power granted to the ERB. The law intends to permit the additional imposts for as long as there exists a need to protect the general public and the petroleum industry from the adverse consequences of pump rate fluctuations. The standard may be implied and the proper exercise of the delegated power can be tested.

5. The reimbursement of financing charges is not authorized by the law, as they were not incurred as a result of the reduction of domestic prices of petroleum products. However, the payment of inventory losses is upheld as valid, as it is a result of domestic price reduction. The reimbursement for cost underrecovery from the sales of oil to the National Power Corporation is permissible under other laws and regulations. The enactment of R.A. 6952 further authorizes the reimbursement of cost underrecovery incurred as a result of fuel oil sales to the National Power Corporation.

6. The Court did not find any substantive discussion or arguments presented by either party regarding the legality of the overpayment refunds. Therefore, unless the impropriety or illegality of the refund has been clearly and specifically shown, there is no basis to nullify it.

7. The Court finds no necessity to rule on the remaining issue as the pump rates of gasoline have already been reduced to levels below those prayed for in the petition.

PRINCIPLES:

• The government has the authority to establish and maintain funds, such as the OPSF, through its police power to secure the physical and economic survival and well-being of the community.

• Special funds, although referred to as taxes, can be imposed in the exercise of the government's police power and are considered state funds, subject to specific purposes and administration.

• The delegation of legislative power must be complete in itself and must fix a standard by which the delegate must exercise the authority. The standard need not be fixed or rigid, as long as it provides guidance and takes into account the circumstances under which the power is to be exercised.

• The non-delegation of powers does not require the express enumeration of standards. The standard may be implied from the policy and purpose of the law.

• The standard must define legislative policy, mark its limits, and specify the circumstances under which the legislative command is to be effected. It is the criterion by which the legislative purpose may be carried out.

• The enumeration of specific items preceding a general provision does not limit the scope of the general provision unless there is a common characteristic among the specific items. Ejusdem generis may not be applied if the specific items do not have a common characteristic.

• Unless the impropriety or illegality of a refund has been clearly and specifically shown, there is no basis to nullify it.

• A claim may be rendered moot and academic if the issues raised in the claim are no longer relevant or have already been resolved.