On the OPSF and the Downstream Oil Industry Deregulation: Lead Us Not into Reversal Temptation and Deliver Us from Obfuscation

Adoracion Navarro

Philippine Journal of Development, 2023

Abstract: The recent calls to review the Oil Price Stabilization Fund (OPSF) are seen as a policy reversal of the downstream oil industry deregulation. The OPSF’s history reveals lessons, as petroleum price setting and using the fund resulted in mismatches and subsidies from the national budget. Policymakers faced challenges in adhering to the OPSF’s purpose, leading to price distortions and cross subsidization. Despite global trends toward removing fossil fuel subsidies, some countries with stabilization funds struggle to sustain operations. The current oil crisis triggered by the Russia-Ukraine war raises questions about deregulation, but the suggestion is to focus on reform durability rather than policy reversal. A dedicated communication campaign is proposed to educate the public about deregulation’s premise and promises. Policymakers are urged to commit to legislative amendments that improve, rather than reverse, reforms.

Keywords: Oil Price Stabilization Fund; oil price regulation; downstream oil industry deregulation; policy reversal; price unbundling; strategic oil reserves; fossil fuel subsidies (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:phd:pjdevt:pjd_2023_vol__47_no__2b

DOI: 10.62986/pjd2023.47.2b

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