Study Of Welfare Effects Of Government Regulation In Sino-Oil Industry

Sino-oil industry has long been tightly controlled by government regulation. Although Chinese government carried out the reform of administrative restructure and introduced market mechanism in the industry in 1998, the monopoly of state-owned enterprises in the industry and the management system of unclear functional division between government and enterprises still remain and the fundamental position of market as the resource distributor is still far from being well established. Government regulation brings about many problems to industry reform and society, which can mainly be seen as follows: high profit, high salary and high welfare are common phenomena in the three blocs--- Petro-China, Sinopec and CNOOC, while the long-term low efficiency of enterprises has no radical change; private enterprises experience high entering standard and narrow existing space, as a result, the state sectors advance as the private ones recede; domestic oil price differs from international price with a delayed time adjustment of price which is more rising than falling, therefore severely damages consumers'interests.Given the problems concerning government regulation in oil industry, the present thesis analyzes industry administrative mechanism from aspects of regulatory status quo, property order, market structure and price regulation and comes to the conclusion: our country's oil industry still adopts the administrative mechanism of monopoly operation by state-owned enterprises and unclear functional division between government and enterprises; such a mechanism makes government regulation to be replaced by administrative monopoly, thus, maintains and strengthens the monopoly place of Petro-China, Sinopec and CNOOC.Then, we measure the market force maintained by administrative monopoly of Sino oil industry, via method of new theory of organization, Hall-mode and economic method in measuring penal statistics and draw the conclusion: Sino oil industry own strong market force. Economical efficiency of oil industry is also measured by index of productivity of nonparametric DEA's Malmquist to testify that industry economical efficiency isn't facilitated by increase of high monopoly profit, and high monopoly profit results from exercising strong market force and setting down high monopoly price. Also we classify social costs caused by administrative monopoly into explicit cost and implicit cost, measure the two exactly by resorting to many relevant economic theories and methods and come to the conclusion: administrative monopoly entails tremendous social cost. Next, we build game mode to study the three blocs involved in the reform of oil industry according to the regulation-and-seize theory and the theory of special profit groups, so as to explain the reason why our country fails in oil industry regulation reform through the relations among their trilateral gaming.Present author argues that the reform policy of regulation in oil industry is based on the objective preferential choice of administrative institution of government towards the special interest groups of oil monopoly enterprises and the interest groups of consumers as a balanced result of the trilateral gaming. Due to poor organizing and lack of information, the interest groups of consumers have difficulty in affecting governmental decision through effective approaches, while the special interest groups of oil monopoly enterprises have a lot to bargain with government and influence its policy making with the privilege of organizing and information advantadges. In reality, the failure in oil industry regulation reform results from the fact that government is seized by various"fake information"and"donation"of oil monopoly enterprises, so government regulation is replaced by administrative monopoly. Moreover, current industry regulatory mechanism facilitates and secures such a seizure and the monopoly of oil market by the three state-owned oil blocs by providing the system guarantee. Therefore, the priority of the reform in oil industry now is to deepen the reform of current industry mechanism. We put forward detailed policy advice about regulation reform, from aspects of oil industry legislation, property order, market entering mechanism, business cost and profit management, and oil pricing mechanism.