2003年-世界发展银行全球_The_Role_of_Advocacy_in_Competition_Policy___The_Case_of_the_Argentine_Gasoline_Market_36页_31mb

Summary of "The Role of Advocacy in Competition Policy: The Case of the Argentine Gasoline Market"

Core Content

This working paper by Tomás Serebrisky analyzes the role of advocacy in competition policy, focusing on the Argentine gasoline market. It evaluates the impact of policy recommendations made by the Argentine Antitrust Commission (SDCyC) in 2000, which aimed to enhance competition in the market through measures targeting vertical integration and contract duration.

Main Points

1. Deregulation and Privatization Background

• In 1991, Argentina deregulated the gasoline market, ending government control over prices, refining capacity, and retail outlets.
• YPF, the state-owned petroleum company, was privatized in 1993, which led to a significant increase in productivity and efficiency in the oil sector.
• Despite these changes, the market structure remained highly concentrated, with four firms controlling over 85% of the gasoline market.

2. Competition and Price Behavior

• The study shows that gasoline prices in Argentina did not adjust closely to changes in crude oil prices, unlike in the U.S.
• The "Price minus Import Parity" variable remained positive for all gasoline types from 1994 to 2001, indicating that domestic firms were not price takers and that imports had limited influence on domestic pricing.
• This suggests a lack of effective price competition, possibly due to market concentration and strategic behavior by incumbent firms.

3. SDCyC Policy Recommendations

• The SDCyC proposed two key policy recommendations:
  • Limiting the duration of contracts between oil companies and dealers.
  • Establishing a ceiling on vertical integration, restricting the percentage of gasoline stations an oil company can own and operate.
• These recommendations were implemented by the Argentine government and represent a rare instance of competition advocacy in Latin America.

4. Impact of Privatization Model

• The privatization of YPF was driven by fiscal and political objectives rather than competition promotion.
• The government opted for a "national champion" model, maintaining control over strategic decisions and not forcing structural changes that could have increased competition.
• As a result, the market remained highly concentrated, with limited development of a wholesale gasoline market and no effective price discipline.

5. Role of Independent Refineries and Wholesale Market

• Argentina has seven refineries producing over 90% of the gasoline consumed, all owned by existing oil firms.
• The lack of independent refineries and an underdeveloped wholesale market contributed to the dominance of vertically integrated firms.
• A more competitive market would have benefited from the presence of independent refineries and a well-functioning wholesale market, which could have allowed for price arbitrage and increased market transparency.

6. Contractual Arrangements and Barriers to Entry

• Exclusive contracts between oil companies and dealers were identified as a key barrier to entry.
• In Argentina, the dominant contractual arrangement is DODO (Dealer Owned - Dealer Operated), where oil companies provide loans and equipment to dealers.
• These arrangements limit dealer autonomy and reinforce the dominance of incumbent firms.

Key Information

• SDCyC Advocacy: The SDCyC played a proactive role in advocating for competition-enhancing policies, which is uncommon in Latin America.
• Market Concentration: Four firms control over 85% of the market, with RepsolYPF as the leader at 45%.
• Price Rigidity: Gasoline prices in Argentina are not responsive to crude oil price changes, indicating a lack of competition.
• Import Parity: The "Price minus Import Parity" variable remains positive, suggesting that domestic firms have pricing power and that imports do not effectively discipline prices.
• Wholesale Market Development: The absence of a well-developed wholesale market and independent refineries limits price competition and increases market rigidity.
• Contractual Barriers: Exclusive distribution contracts between oil companies and dealers act as a strategic barrier to entry and hinder competition.

Conclusion

The paper highlights the importance of competition advocacy in shaping market structures, even in the absence of clear anticompetitive behavior. It concludes that the policies recommended by the SDCyC, while not directly altering market structure, aimed to stimulate more effective price competition. However, the lack of structural changes and the continued dominance of vertically integrated firms suggest that the impact of these policies has been limited. The study underscores the need for governments to use privatization and deregulation as opportunities to reshape market structures in favor of competition.