Higher oil prices are creating major problems for Asian countries which subsidize fuel costs, threatening economic growth if the subsidies are kept in place and consumer outrage if they are not.
Malaysia raised the price of fuel between 7 percent and 23 percent last week in a bid to cut the soaring cost of government subsidies, but analysts warned the country could face a "double whammy" in the form of a slowdown in the growth rate and a hike in inflation.
Subsidies for petroleum cost the government 4.8 billion ringgit (US$1.2 billion) last year and would reach 8.9 billion ringgit this year if prices were not increased to help cope with rising international oil costs, the government said.
A diesel shortage crippled Malaysia's transport industry last month after the government introduced a quota system in an attempt to curb smuggling of the heavily-subsidized fuel to neighboring Thailand.
Thailand began subsidizing fuel in January last year, but the scheme quickly became a budget-buster as world oil prices kept rising.
Petrol subsidies were scrapped after nine months, and the government in March reduced its diesel subsidy, sending prices at the pump jumping by 20 percent.
Thailand has spent 84.7 billion baht (US$2.1 billion) on both petrol and diesel subsidies.
In India, the government has been trying to keep a cap on inflation in the face of rising global oil prices.
Fuel cost rises can be political dynamite in a country where around one-quarter of the population of more than 1 billion live on less than a dollar a day, but oil subsidies weigh heavily on the Indian budget and attempts to contain a soaring budget deficit.
The government resorts to "off-budget" subsidies for specific products like diesel, kerosene and liquefied petroleum gas (LPG).
It subsidizes the cost of LPG and kerosene, used largely by India's rural poor, by charging more for gasoline used by more affluent car and vehicle owners.
But that hasn't managed to cover costs as demand for the cheaper fuel grows as companies and consumers mix it with gasoline.
The government estimated the cost of the subsidy at US$3 billion in the fiscal year ended March 31.
In Indonesia, despite strong opposition from the public and in parliament, the government increased fuel prices by between 22 and 47 percent to help cut costly subsidies as of March 1.
The price of kerosene, mainly used by low-income families for cooking and so a very sensitive commodity, was not raised.
Top economy minister Abu Rizal Bakrie said after the announcement that the cash-strapped government was forced to act after having to spend some 61 trillion rupiah (US$6.4 billion) on subsidies last year.
This year's target for subsidies was set at 39 trillion rupiah (US$4.2 billion). Last year's fuel subsidy spending exceeded the initial budget amount by more than four times because of higher than expected world oil prices.
The subsidies had also led to rampant smuggling to Singapore and to East Timor, officials and police have said.
The Asian Development Bank (ADB) said last month that state subsidies on oil products were doing great harm and barely any good in India, Indonesia, Malaysia and Thailand.
The bank urged its four member-countries to scale back subsidies and align prices with the market.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”