MARKET LIBERALIZATION IMPACT ON OIL RETAIL PRICES IN NORTH MACEDONIA AND THE EX YU REGION

Abstract

Market liberalization is often regarded as a process of freeing the market from all types of monopolies, which should eventually increase the competition and provide better offer followed by lowers prices. In terms of oil economics, regulated oil retail prices are often regarded as contra productive for sustainable economic growth. Market liberalization contributes for countries not to depend on a single company in the import and sales of oil products and thus guarantees energy stability. Liberalization and oil retail prices are often interrelated and the effect of its interaction is usually the one affecting the prospects of the entire economy. This paper emphasizes the importance of market liberalization and its influence on oil retail prices. This paper is explicitly focused on the leading oil companies in North Macedonia and the Ex Yu region. The aim of this paper is to present the market liberalization process in the oil industry by analyzing the effect of market liberalization on oil retail prices. The research is concentrated on six leading oil companies, with particular focus on the oil retail prices. The research outcome revealed that full market liberalization is not always beneficial and might have different effect on country’s business economy and energy infrastructure.