RP declares full oil sector deregulation<\/p>\n
MANILA (Reuters): The Philippines declared full deregulation
\nof the nation's oil industry on Saturday, allowing oil companies
\nto set pump prices for all but three products.<\/p>\n
President Fidel Ramos signed Executive Order No 471 declaring
\nderegulation of the downstream petroleum industry, effective
\nimmediately.<\/p>\n
An oil reform law signed last February had prescribed a five-
\nmonth transition period to full deregulation during which the
\nEnergy Regulatory Board (ERB) would regulate price adjustments
\nonce every month.<\/p>\n
But the law also gave Ramos the authority to shorten the
\ntransition period.<\/p>\n
Full industry deregulation is one of the major structural
\nreforms the country must undertake before it can exit from
\nInternational Monetary Fund supervision. Manila is working
\ntowards an exit by the end of the month.<\/p>\n
The law threw open the domestic oil industry, which has been
\ndominated by three giant companies, to new players.<\/p>\n
\"Fears from certain sectors, especially from militant groups,
\nthat deregulation will favor the three big sisters... have no
\nbasis since they will be forced to follow up the flow of the free
\nmarket forces and face competition coming from new players,\"
\nRamos said in a statement.<\/p>\n
The firms are Saudi Aramco-backed Petron Corp, Pilipinas Shell
\nPetroleum Corp, a subsidiary of Royal Dutch Shell Group, and
\nCaltex Corp, a joint venture between Chevron Corp and Texaco Inc.<\/p>\n
Ramos, citing declining world crude prices and a stabilizing
\npeso, allowed unregulated price adjustment, except for liquefied
\npetroleum gas, regular gasoline and kerosene, which are used
\nmostly by the poor.<\/p>\n
Prices for these three products will still be regulated by the
\nERB and subsidized by the state.<\/p>\n
The Department of Energy, which recommended the immediate full
\nderegulation, said in a statement that the coming spring season
\nin the northern hemisphere would weaken petroleum demand.<\/p>\n
An economic slowdown in Southeast Asia and a stable supply of
\nIraqi oil under a United Nations-sponsored food-for-oil agreement
\nwould have also contributed to a further drop in crude prices.<\/p>\n
\"These factors are expected to minimize upward pressure on
\nprices of these products in the next few months, notwithstanding
\nthe historically based cyclical upward adjustment beginning the
\nthird quarter of the year,\" the department said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rp-declares-full-oil-sector-deregulation-1447893297",
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