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Competition Policy in the Philippine Downstream Oil Industry


  • U, Peter Lee


The Philippine downstream petroleum industry underwent monumental change with the passage of RA 8180, the original Downstream Oil Industry Deregulation Act. This paper surveys the industry developments before and after deregulation and analyzes the consistency of the Supreme Court decision with economic theory. The report argues that tariff differentials are currently built into the country’s tariff code as a matter of policy, even in the context of the tariff reform programs. The paper uses a theoretical model (a simple extension of the Bertrand price fixing game) that shows that similar prices and timing of prices changes can be consistent with competition. Moreover, the model predicts an asymmetry in the timing of price changes. It also looks at the proposed national oil exchange and examines the experience of other countries’ regulation of the downstream petroleum industry.

Suggested Citation

  • U, Peter Lee, 2000. "Competition Policy in the Philippine Downstream Oil Industry," Discussion Papers PASCN DP 2000-14, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:pascn_dp_2000-14

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    References listed on IDEAS

    1. Reilly, Barry & Witt, Robert, 1998. "Petrol price asymmetries revisited," Energy Economics, Elsevier, vol. 20(3), pages 297-308, June.
    2. Barron, John M & Umbeck, John R, 1984. "The Effects of Different Contractual Arrangements: The Case of Retail Gasoline Markets," Journal of Law and Economics, University of Chicago Press, vol. 27(2), pages 313-328, October.
    3. Severin Borenstein & A. Colin Cameron & Richard Gilbert, 1997. "Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes?," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 305-339.
    4. Asher Blass & Dennis W. Carlton, 1999. "The Choice of Organizational Form in Gasoline Retailing and The Costs of Laws Limiting that Choice," NBER Working Papers 7435, National Bureau of Economic Research, Inc.
    5. Jeffrey D. Karrenbrock, 1991. "The behavior of retail gasoline prices: symmetric or not?," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 19-29.
    6. Andrea Shepard, 1993. "Contractual Form, Retail Price, and Asset Characteristics in Gasoline Retailing," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 58-77, Spring.
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    Cited by:

    1. John Michael Ian S. Salas, 2002. "Price Adjustments and Asymmetry in the Philippine Retail Gasoline Market," Industrial Organization 0209001, EconWPA.


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