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Singapore: From a bus operator in Singapore to a salesman in Seoul, the surge in oil prices to $100 a barrel is rattling consumers and businesses across Asia.
A barrel of benchmark crude in New York briefly hit the triple-digit barrier for the first time on Wed-nesday, and while the rising cost of oil has yet to dampen the rapid growth of the region's economies, it is being met with worry
It is not just consumers who are worried. Many Asian countries put price caps on fuel in order to protect the poor and curb inflation, and record high crude oil increasingly pressures governments to re-evaluate their subsidies.
"Energy prices in many of these countries don't necessarily reflect the international market value and I don't think you can hold off against that tide for very long," said Steven Knell, a London-based energy analyst with Global Insight.
Knell said state fuel subsidy regimes were to an extent adding to the momentum that has propelled prices higher.
Irrational policies
"These governments are encouraging more and more consumption... They're actually contributing to the higher prices that are forcing them to incur more and more losses," he said.
"There's an element of irrationality to these policies." The Chinese government raised diesel and gasoline prices by about 10 per cent in November to curb demand at a time when refiners say they are losing money due to controls that block them from passing on record-high crude costs to consumers.
"I'll end up spending 150 yuan ($20) more on gasoline per month," said Shang Yun, a 33-year-old civil servant who relies on a white Chery to get to and from work in Shanghai. "My home is far from my office and there aren't many buses. The subway is so crowded, too. I am almost forced to drive a car."
Malaysia also heavily subsidises retail oil prices but officials estimate that with oil prices at $100 a barrel, the government would have to spend 35 billion ringgit ($10 billion) on fuel subsidies every year.
Prime Minister Abdullah Ahmad Badawi has signalled he will soon reduce the subsidies, though he has not said when.
In Singapore, private bus operator Simon Lee said his company's operating costs have increased 30 per cent over the past year.
"The main culprit is the fuel cost increases, but we can't transfer any of these increases on to the consumer because the industry is so competitive," said Lee, who operates a fleet of 25 vehicles that transport schoolchildren and company staff.
Lee, 30, said that to cope with the price hikes, he's switched to buying diesel from cheaper, private providers rather than from major oil companies.
Delaying the inevitable
The relief was only temporary. His new supplier now charges Singaporean $1.20 for a litre of diesel, or $3.17 a gallon, up more than 20 per cent since November. A full tank of diesel on a regular bus now costs around S$240 ($167), an increase of about S$50 ($34) from before, Lee said.
In Australia, Canberra bicycle shopowner Henry Boardman was also worried about how long he could continue absorbing higher fuel prices.
"The biggest impact for me is the added freight costs" of keeping his business stocked, he said.
Still, analysts point out that the region's economies have so far been resilient.
Businesses are more fuel efficient than they were during the oil shock of the 1970s, and Asian countries have tried to reduce their dependence on oil, although it remains higher than the global average.
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