INDONESIA is not the only country in Asia grappling with the issue of a bloated subsidy bill in the face of soaring oil prices. Here is a look at the reaction in some of the other affected countries.

CHINA

The Chinese government said that stock market rumours of an imminent increase in domestic fuel prices were 'groundless'.

However, analysts forecast that Beijing would eventually endorse subsidy cuts.

'It is probably more affordable for a country like China to subsidise than Indonesia,' Mr Peter Gastreich, oil and gas analyst at UBS in Hong Kong, was quoted by the Financial Times as saying. 'But if oil prices keep going up, it is simply not in any country's best interest to keep subsidising these prices indefinitely.'

INDIA

India's Petroleum Ministry said yesterday that a domestic fuel price hike was 'inevitable' to bail out state oil firms selling fuel at hugely discounted rates and reeling from surging global prices.

The Press Trust of India reported without naming sources that the Petroleum Ministry was seeking a 10 rupee a litre (S$0.32) increase in petrol prices and a 5 rupee a litre hike in diesel prices.

The ministry was proposing a combination of price hikes and duty cuts to reduce the revenue shortfalls suffered by state-owned refiners from the sale of petrol, diesel, liquid petroleum gas and kerosene.

AGENCE FRANCE-PRESSE

MALAYSIA

A restructured subsidy scheme, where the rich will have to pay more for items, especially fuel, will be introduced in a few months.

Second Finance Minister Nor Mohamed Yakcop, speaking after an economic forum in Singapore on Thursday, said: 'We need to have a good system for those who deserve the subsidy, such as the lower- and middle-income groups.'

Tan Sri Nor Mohamed said the country's projected inflation rate of 3 per cent or higher would not be a major problem as there was enough support for the lower-income group with the subsidy scheme, which also covered health care and education.

THE STAR/ASIA NEWS NETWORK

TAIWAN

Taiwan plans to increase fuel prices on June 2, and electricity prices in July.

But Premier Liu Chao-shiuan said on Thursday that Taiwan would distribute NT$20 billion (S$891 million) in subsidies to middle- and low-income families to offset higher energy costs.

BLOOMBERG