Oil prices have increased by an average of 50% over the past year, highlighting the failure of oil deregulation in bringing down petroleum prices and the urgency of reinstating regulation, according to independent think-tank IBON Foundation.

Between June 2007 and June 2008, average pump prices of unleaded gasoline and diesel have increased by 47% and 52%, respectively.

Further, since the start of deregulation in 1996, pump prices of unleaded gas have increased by 492 percent. Meanwhile prices of diesel have increased by 607 percent.

Oil deregulation was supposed to ensure affordable and accessible petroleum products by breaking up the local oil cartel, allowing “market forces” to determine the real price of oil. Instead, it only gave Shell, Petron and Chevron (formerly Caltex), more room for speculation and to dictate prices and price hikes. IBON estimates that as much as 47% to 54% of the pump price of petroleum products represents windfall profits of the oil firms.

An effective way to break up the monopoly control of the oil firms over the local downstream oil sector and ensure affordable and accessible oil products is to revoke the oil deregulation law and give the government regulatory authority over the oil industry. (end)

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