Word: fueled
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...several factors make the crunch particularly painful in Asia. The vast majority of countries in the region are net importers of oil. Only Malaysia and Vietnam are able to produce enough crude to be net sellers. In addition, several Asian governments for years have spent billions of dollars subsidizing fuel costs to keep it cheap for their poor and often quarrelsome citizens. But oil is now so expensive that subsidies and price controls are increasingly impossible to maintain. Over the last two weeks, India, Indonesia, Malaysia, Pakistan and Sri Lanka have announced they are reducing or eliminating subsidies...
...effect of reduced fuel subsidies will ripple through economies, increasing costs across a wide range of industries, boosting inflation, undermining government budgets and stirring up unrest among citizens who are already feeling the bite of slower growth. In India, as elsewhere, the main reason governments impose controls on petroleum products such as diesel, kerosene and liquefied petroleum gas (LPG) is to help millions who live on less than $1 a day - and to give politicians a chance to stay in power on election day. "There's the economics of it and there's the politics of it," says Suman Bery...
...consequences. They distort normal consumption patterns and subvert the law of supply and demand. When oil supplies are low and crude prices rise, consumption falls, bringing prices back down as demand and supply balance out. But if consumers are insulated from the market, paying an artificially low price for fuel, they tend to use as much or even more - which strains supplies further and forces oil prices even higher...
...Manipulating markets is a luxury that governments increasingly cannot afford. The Indian government spent almost $9 billion last year on fuel subsidies, adding to the country's budget deficit. State-run gasoline retailers have been losing billions of dollars as well because they are forced to sell to consumers at prices set by New Delhi. When the three largest state-owned oil companies warned recently that they would soon run out of money to import oil, the government finally raised price caps...
...Since June 4, gasoline is up by 11%, diesel by 10% and LPG by 17%. The price of kerosene, the most widely used cooking fuel, was left unchanged, but the other increases will push up India's inflation rate, which at 8.24% is already at a four-year high. Public anger is growing. India's leftist parties called for a week of protests after Singh's TV announcement. The states of West Bengal, Tripura and Kerala saw general strikes that emptied the streets. Slogan-shouting housewives marched through New Delhi, while in Mumbai protestors rode bullock carts to show that...