Sunday, August 20, 2006

State owned oil companies

The economist has an article on state owned oil companies. The conclusion is that most of the oil reserves in the world are state owned and ill managed. This is the strongest case for oil market liberalisation I have heard (then again I have not been following journals all my life). The idea is simple, there isn't the required incentive structure in government run companies for them to be run profitably. Then again petroleum prices in countres like India are heavily regulated and there is heavy resitance against price increases.

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