Slashed subsidies
The cost of fuel in many countries has risen dramatically after their governments cut subsidies.
India’s government, which imports 70 per cent of its oil, cut fuel subsidies earlier in the week, causing an 11 per cent rise in the cost of petrol.
Strikes and protests against the government decision spread across India, paralysing transport in two key states and hitting businesses in Hyderabad and Kolkata on Friday.
Thousands of people demonstrated in Mumbai the previous day, also venting their anger at the cost of gas and food.
Malaysia’s government has also slashed fuel subsides, causing prices to nearly double.
After a chaotic rush by drivers to fill up on the last of the subsidised fuel, police in the capital Kuala Lumpur were braced on Friday for a backlash from angry protesters.
In Indonesia, small businessmen are feeling the pinch.
Despite widespread protests, costs have soared by 30 per cent in the last few weeks.
The government scrapped expensive fuel subsidies it said would be better spent on education and development.
The country is also pulling out of Opec, the oil exporters’ cartel, because it cannot produce enough oil to export.
In Europe, fishermen, farmers and lorry drivers have held massive protests over the rising prices.
Action in Belgium turned violent when riot police charged fishermen on Wednesday after rocks and firecrackers were hurled across the barricades.
Increasing demand
Since last year, the price of a barrel of oil has nearly doubled in rises attributed to a weakend US dollar and increasing demand – leading to riots, protests and panic-buying in many parts of the world.
Tan Siok Choo, a Malaysia-based business analyst, told Al Jazeera: “Asia’s definitely part of the problem, in the sense that extraordinary demand for oil has been brought about because economies like China and India have been doing very well, and that has been translated into exceptionally high car sales.”
Some analysts have predicted a drop as a result of steps taken by Asian governments.
John Kilduff at MF Global brokerage firm, said: “Demand is now fully the focus of market participants. The demand stalwart, Asia, is finally buckling, as emerging economies in the region are cutting fuel subsidies.”
Airline casualties
High fuel prices have also hit global airlines.
US carrier Continental Airlines announced on Thursday 3,000 job cuts and the halting of service for 67 ageing aircraft because of rising fuel prices.
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The price drivers pay for petrol per litre varies wildly around the world:
Turkey: $2.68
UK: $2.26
Hong Kong: $1.99
Brazil: $1.56
Pakistan: $1.06
US: $1.05
Saudi Arabia: $0.12
Venezuela: $0.05
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Two other big carriers, American and United Airlines, have made similar moves.
Some analysts say subsidy cuts in Asia will not be enough to curtail demand.
Harry Tchilinguirian, oil analyst at BNP Paribas, said: “World oil demand growth is still accounted mostly by China, the Middle East and Latin America – and through the summer, there is no reason to expect a material slowdown in demand growth in these areas.”
The International Energy Agency warned on Friday that oil demand would rise by 70 per cent if governments continued with their current policies.
World governments must start a $45 trillion “energy technology revolution” or risk a 130 per cent surge in carbon emissions by 2050, the consumer watchdog said.
Choo, of Malaysia’s Noordin Sopiee and Associates group, said biofuels and public transport systems are the most viable options for reducing demand.
“But [change] takes active government involvement”, she said. “We can’t leave it to the private sector.”
Oil price puts squeeze on Indonesia