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

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.