Novel investigative assessment of policy reforms implemented by petroleum sensitive countries in response to fluctuating oil prices

The volatility of energy prices has undoubtedly influenced the world economy which ultimately resulted in the transformation of political, economic and financial agendas of several countries. This extensive study examines the various reforms and regulatory approaches implemented by Petroleum Sensitive Countries (PSC), to tackle the various complications that materialized due to fluctuating oil prices. The various types of reforms are identified and assessed with respect to their success criteria in providing a more resilient economic structure on the long term. An in-depth assessment includes the establishment of novel weightage factors for determining their impact and the probability of success for individual reforms. This paper identifies key reforms along with its associated short-term and long-term effects on the domestic and global economies. These highlighted reforms are analysed in depth followed by performing multiple comparative qualitative risk/opportunity assessments and defining new weightage factors. The success criteria of each reform are based on its probability of being efficient as well as the extent of its positive impact on the long term. Oil exporting and importing countries, especially Petroleum Sensitive Countries, reacted differently by initiating different types of reforms in order to mitigate the low oil price implications. It is found that the most common and effective reform implemented by these PSCs is maneuvering with energy prices along with production manipulation. In short, revising energy prices and abolishing fuel subsidies for the end users, imposing taxes on commodities and limiting the total production output. It was found that energy price reforms along with infrastructural development & investment reforms coupled with long term future vision reforms have the highest impact and possibility of succeeding in improving the economies in the current conditions along with fostering long-term resilience and profitability. Analyses of potential risks surrounding these reforms and discussion of the underlying consequences is also discussed in detail. Reforms by Russia have also been analyzed as they have not interfered with the their energy pricing strategies and instead focused on implementing other short term effective reforms such as production regulation, minerals taxing and privatization of national companies. The highlight of this paper emphasizes on the requisite, the impact and the effectiveness for implementing energy pricing reforms in Petroleum Sensitive Countries should a similar situation arise in the future. This novel investigative study which is coupled with extensive investigation and qualitative risk/opportunity assessment summary will act as a paradigm for future studies.