The economic boost from falling global oil prices is being blunted in Asia as governments in the region that regulate fuel prices use the decline to boost state coffers instead of passing savings on to consumers through cheaper petrol, the Wall Street Journal reported on Thursday.
Asia is the world's largest importer of crude oil and for years, as global oil prices rose, countries in the region shielded consumers and businesses through a complex and costly web of fuel subsidies, said the Journal.
But now that oil prices are plunging, many governments are taking the opportunity to unwind these subsidies, the Journal noted. Indonesia, Malaysia and India have taken steps in recent weeks to raise government-set fuel prices, while China has hiked fuel-consumption taxes twice in the past month, the first rises since 2009.
As a result, said the Journal, lower crude prices are not filtering through into cheaper petrol pump prices to the same extent as in the United States.
Thus while drivers in New York City have seen prices of regular petrol fall 26 per cent since the end of July, in Beijing government-regulated petrol prices have come down about 17 per cent during roughly the same period, while in Malaysia and Indonesia, some fuel costs have actually risen, said the Journal.