Price Controls on Gasoline in Certain Asian Countries


In Malaysia and Indonesia, which have the cheapest petrol in Asia, fuel subsidies account for over 10% of total government spending. [...]

Not only are price controls no long-term cure for inflation, argue many Western commentators, but if domestic fuel prices are not allowed to rise in line with crude-oil prices, then motorists from Beijing to Bangalore will guzzle more oil. This, in turn, pushes global oil prices higher.

Oil subsidies also make clean alternatives relatively less competitive, so their development and adoption is slower. ::The Economist Graph credit: The Economist, Lehman brothers, EIA, reuters

Tags: Asia | Energy | Oil

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