39 Consideration should be given to modifying regulations if there is a reasonable chance that their costs outweigh benefits.

# **_Price disclosure_**

In markets with price competition, including those with price ceilings, price disclosure could aid price competition. The government can play an important role by collecting information on prices and making the information easily accessible. Among the most detailed, timely, and accessible is the online price database in Chile—mandated by a resolution issued in January 2012—which is also available on iPhone, BlackBerry, and Android. The database gives viewers the choice of displaying data in order of increasing or decreasing price and the address of each filling station, prices, and the date and time of the last price change (CNE 2013).

The government of Guatemala highlights on its Web site the filling stations with the lowest prices in the Guatemala City Metropolitan Area with their addresses and street maps every week (Guatemala MEM 2013). The Nicaraguan Institute of Energy surveys about 75 filling stations in Managua every week and provides details on the three highest-priced and three lowest-priced filling stations (INE 2013). The Authority for Consumer Protection and Competition in Panama, proclaiming “an informed consumer has power,” collects and posts gasoline and diesel prices at filling stations every four weeks, highlighting those with low prices (Panama ACPC 2013).

If only city-average or country-average prices are disclosed, if prices by filling station are published but one month later, or if prices are averaged by company across the country, the scope for promoting price competition is reduced. Aside from disclosing current prices by company and location, it is important to promulgate and enforce a rule that requires prices to be posted on display boards at readable heights that are clearly visible to drivers. For price competition to benefit consumers, there needs to be effective monitoring and enforcement of technical standards, or else a competitive fuel market could lead to partial or total product degradation, with a low-quality product (adulterated, mislabeled, or short-weighted) driving out a high-quality product.

# **7. Conclusions**

In competitive markets in which sound regulations are enforced, costs of price controls are likely to outweigh benefits. Enforcement of sound technical, environmental, health, and safety regulations is a goal in every market, whether or not there is adequate competition or price control. When enforcement is combined with competition, deregulation of the downstream oil sector including prices should be the goal. Absent adequate competition, economic regulation would be necessary, but the goal should be an automatic pricing mechanism that is market-based and that does not introduce market distortions, such as large price differences for similar fuels through inter-fuel tax differentials or subsidies.

Significant government interventions in pricing and large departures from international prices are likely to signal other deep underlying problems: poor budget planning and execution, weak capacity to deliver essential social services, weak capacity to protect the poor and the vulnerable, rampant corruption in the oil sector and its opaqueness, a general lack of sense of security and fairness, or even challenges to the legitimacy of the government. These problems are interlinked, making it difficult to isolate and address the pricing policy for oil products alone. That does not mean that distortions in pricing policy cannot be addressed before all underlying