Asia governments to cap fuel prices as oil costs jump

Some countries across Asia have announced measures to deal with the impact of the soaring global energy costs caused by the US-Israel war with Iran, including capping the petrol prices.

Yesterday, crude oil surged above US $ 100 a barrel on concerns about the potential shortages, due to the prolonged disruption to the Middle East energy supplies.

At the weekend, Iran named Mojtaba Khamenei as its new Supreme Leader – a sign that the hardliners remain in charge of the country – while some Gulf countries halted oil production and there were fresh airstrikes in the region.

The East Asian nations have been hit especially hard by the conflict, due to their reliance on the energy that comes through the key Strait of Hormuz sea route.

The authorities in South Korea and Thailand said they would set limits on the fuel prices.

South Korean President Lee Jae Myung said his government would “swiftly implement” a price cap on the petrol products.

The Iran conflict has created a “significant burden” on the country’s economy, which is highly dependent on the region’s energy imports, Lee said during an emergency Cabinet meeting.

He added that Seoul is ready to step in with additional measures and expand the country’s 100tn won (£50 billion; US $ 67 billion) financial markets stabilisation programme if necessary.

In Thailand, Prime Minister Anutin Charnvirakul urged the people not to stockpile fuel and announced the plans to cap the price of diesel for 15 days. Long queues formed at petrol stations around the country in recent days, with the supplies running low at some outlets.

Vietnam’s Finance Ministry said it is preparing to temporarily remove the taxes on fuel imports.

In the Philippines, new measures aimed at saving energy came into effect.

President Ferdinand Marcos Jr on Friday announced plans for a four-day working week for most public offices, with the exemption of critical services like fire stations and hospitals.

Universities in Bangladesh are also shut from yesterday to save energy, according to the state media.

US President Donald Trump has said on Sunday that a short-term jump in oil prices was a “small price to pay” for removing Iran’s nuclear threat.

Energy Secretary Chris Wright said the oil and gas prices would fall when the US destroys Iran’s capability to strike the tankers in the Strait of Hormuz, a critical waterway for around 20 percent of the world’s oil.

The shipments through the strait have come to a standstill after Iran threatened to attack the vessels that try to pass through the channel, as a response to the US and Israeli airstrikes.

Reopening the strait to shipping is key to easing the energy prices for Asia, as many major economies in the region are reliant on energy from the Middle East. (BBC)