Price Controls on Gasoline in Certain Asian Countries
by Michael Graham Richard, Gatineau, Canada on 03. 6.08
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
We're currently paying $2.15 per litre ($7.53 per us gall) of super unleaded in France. Good. Maybe people will think twice before getting into their cars.
I currently pay about $7 US per gallon here in South Korea. I live in the 6th smallest city but there are so many cars that you spend most of your time idling in line to go through a light. Often it is faster to take the bike! The only reason that I drive to work is that there are no bike paths or sidewalks for the second half of the trip (there are some in most of the city) and Korean drivers are NUTS. Driving in the street is really suicide.
What staggers me about Hong Kong is the number of people here who have *HUGE* SUVs despite our very high fuel costs.
Mostly it's a 'Face' thing: big vehicle commands more status.
The thing is in Malaysia, the government has "pampered" the citizens with highly subsidized petrol all these years, and has made it affordable to drive around. Revoking the subsidies slightly last year, provoked loads of protest and dissatisfaction. It is a mess that the government placed themselves in. Unless someone is daring and drastic enough to reduce the subsidies, this matter will continue.