Deregulation of RP oil industry ordered<\/p>\n
MANILA (AFP): Philippine President Fidel Ramos ordered over
\nthe weekend the full deregulation of the country's oil industry
\nfrom Feb. 8.<\/p>\n
The decision ends a policy of state subsidies to the
\npolitically sensitive sector one month ahead of the original
\nschedule for deregulation, the government said.<\/p>\n
A copy of Ramos' executive order said deregulation was needed
\nbecause a state oil subsidy fund that had served as a buffer for
\nfluctuating world crude prices and the foreign exchange rate
\nwould run out on Feb. 7.<\/p>\n
The document, released to reporters Wednesday, said the
\nderegulation was timed to coincide with a decline in world crude
\nprices and a stable exchange rate between the Philippine peso and
\nthe U.S. dollar.<\/p>\n
\"The deregulation of the industry will foster a truly
\ncompetitive market which can better achieve the social policy
\nobjectives of fair prices and adequate, continuous supply of
\nenvironmentally-clean and high quality petroleum products,\" the
\nexecutive order said.<\/p>\n
The government began a partial deregulation of the sector in
\nthe middle of 1996, gradually raising domestic petroleum prices
\namid protests from left-wing groups.<\/p>\n
Before the deregulation, the domestic downstream oil industry
\nhad been dominated by three giants -- the subsidiaries of the
\nRoyal Dutch Shell Group, Caltex Petroleum Corp. and Saudi
\nArabian-backed Petron Corp.<\/p>\n
A semi-official body, the Energy Regulatory Board, dictated
\nlocal petroleum retail prices.<\/p>\n
The government indirectly subsidized the costs through an Oil
\nPrice Stabilization Fund from which the oil firms drew money to
\ncover losses resulting from changes in world crude prices and the
\npeso-dollar rate.<\/p>\n
Ramos, who has urged Filipinos to wean themselves away from a
\nstate welfare mentality, has deregulated industries such as
\nbanking, shipping and telecommunications, since taking office in
\n1992.<\/p>\n
Deregulation and liberalization have been credited for the
\ncountry's economic turnaround that saw the economy grow from near
\nzero in 1992 to an expected 7.1 percent rise in gross national
\nproduct in 1996.<\/p>",
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