The Oil Industry in Chile (La Industria del Petróleo En Chile)

This article describes and characterizes the oil markets and liquid by-products in Chile from the viewpoint of industrial organization. With that objective in mind, first a systematic description is provided of each of the markets comprising this industry, taking into account the vertical structure of the industry by which this basic natural input reaches the end user: exploration, crude production, crude imports, refining, storage, transportation and wholesale and retail distribution. Then an analysis is made of the industrial organization that identifies possible antitrust behavior in the industry based on the levels of concentration and the degrees of vertical integration and competition. Finally, public policy recommendations are made regarding aspects that require corrective measures or perfecting to guarantee competition. The authors suggest a framework law that should protect competition in the industry and freedom of entry to market segments that can function competitively, under appropriate oversight by the antitrust authorities and minimum sectorial regulation