Record oil prices causing Asian governments deliberation

As a result of spiralling oil prices, which are consistently breaking records, Asian governments are struggling to manage their costs and cope with the changes as some are subsidizing costs for consumers to contain inflation whilst others are raising energy prices in order counter the effect on their balance sheets.

Both Indonesia and Taiwan have pledged payments to low income families in order to subside them through the turbulent price hikes.

Indonesia have the toughest decision to make as the government would have to spend 190 trillion rupiah ($20 billion) on subsidies if fuel prices were not increased.

However, President Susilo Bambang Yudhoyono is running in the upcoming elections and raising fuel duty for the first time in three years will prove to be very unpopular.

Taiwan is planning on increasing fuel duty on June 2 and will use the money generated, estimated to be around $659 million, to subsidize low-income families to help deal with the rise in energy costs.

Elsewhere, American Airlines said that they will have to pay more for fewer flight in order to avoid the threat of bankruptcy, whilst in the UK, lorry drivers are planning to protest against the Government.

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