Oil Deregulation Law and Its Effects on the Filipino People

Abstract

RA 8479 or the Deregulation of the Downstream Oil Industry Act of 1998 was conceptualized after the Supreme Court declared RA 8180 unconstitutional as it violated Section 19 of Article XII of the Constitution. While it was supposed to create a market that fosters fair competition and low prices of oil products, the deregulation of the oil industry as perceived by some economists and legislators hasn*t achieved its goals eight years after its formulation. In this regards this research aimed to find out what RA 8479 is, its effects on the consumers, businesses and the country as a whole and why it has seemed to be a big failure. RA 8479 in its essence allows the entry of new players in the industry and it encourages competition. This competition will result into a more effective and efficient services rendered by the oil companies, but in reasonable price. Since the Philippines is an oil-import dependent country, the framework of analysis will dig on the concept of co-dependence. This term was put forward by Charles Doran in his Book Myth, Oil and Politics (1979). It concludes that each partner 一 the consumer and producer nations 一 needs each other and hence is dependent to each other. Co-dependence is a term used by some well known economists in referring to country that is heavily dependent on oil as the driving force for its industrialization. Books, papers, survey and interviews with key informant were the main source of information in the research. Some sources from the website of the giant oil companies have helped a lot in assessing how significant role of the big oil companies. Progressive partylist representatives like Congressmen Satur Ocampo and Teodoro Casino of BAYAN MUNA and RON Senior Researcher Arnold Padilla were interviewed and consulted. Policy papers on oil deregulation and its effects were reviewed. Survey with drivers and ordinary consumers were conducted. Newspaper articles have been a huge help especially in getting opinion of some experts and economists. The history of the oil deregulation in the Philippines is tracked down in this research; the different provisions of the law have been discussed thoroughly. The research also listed some reasons why the researcher perceives the law to be a failure in bringing a competitive oil industry. The effects are studied and considered. The positive effects of the deregulation are also sighted and discussed. In the hope to answer the problems, six proposals are also raised in this research. These sound proposals might help the government in policy formulation to bring about a truly competitive oil industry with affordable prices of goods and services.