In a call-in radio program, one listener insisted that oil deregulation law must be scrapped to solve unstable oil prices. Sulbad gyod tanan! He said in local dialect.
He is not alone. Many of our political leaders follow the same line of thought although some others are considering review of oil deregulation law. Militants are claiming oil deregulation law has not serve its purpose. Instead of making the oil industry in the Philippines more competitive, it never stop the alleged cartel of big oil players, Petron, Shell, and Caltex. The entry of independent oil companies, many observers claim, has not made significant impact.
Now the question is whether to continue to deregulate the oil industry or to regulate it?
Regulating means subsidizing which also means slicing big part of national fund just to keep oil price stable. This also means that we don’t need to worry when prices of oil market is on its all-time high because we still buy our oil here at same price becuase our goverment subsidize it.
We may be buying affordable oil but can we afford of not getting enough government services? Of course our budget in education, in infrastructure, in health will get slashed because we need huge fund for oil subsidy. Without the oil deregulation law, Oil Price Stabilization Fund (OPSF) would need at least 8.3 billion pesos in 1998. Imagine how much OPSF need in 2008 and 2009!
Scrapping of oil deregulation law is not a solution. Besides regulation is not good for business. Regulation in some way prevents business to grow.
Blog authored by batang buotan: (Link opens in new window)