Oil subsidies

smilin

BOXER NATION
I just read the following article (BBC NEWS 6/07) and am amazed that Congress is currently debating an increase in our gas tax YET China, India and Japan are subsidizing their citizens gas consumption and saying they will not change.

Oil hike sparks 'serious concern'

Some suggest crude could reach $150 a barrel by July
The US and the four largest economies in Asia are to voice "serious concerns" over "unprecedented" oil prices.

Energy ministers are meeting in Japan a day after a record one-day jump in the crude oil price, to $139 a barrel.

Under pressure from the US, Japan, China, India and South Korea have agreed on the need to end fuel subsidies, blamed for boosting demand.

But correspondents say there are major differences over the speed and extent to which the changes should be made.

The soaring cost of oil is causing growing strain to economies around the world, with some governments facing protests and other pressures from consumers and businesses.

Both the Indian and Malaysian governments have recently raised fuel prices in order to cut the subsidies they provide.

Officials and ministers from the Group of Eight (G8) key industrialised nations, as well as China, India and South Korea, are meeting for two days in the northern city of Aomori.

In a statement to be issued after the talks, the US and Asian countries are expected to say rising oil prices pose a great burden, especially on developing countries and are "against the interest of both consuming and producing countries", news agencies reported.

It will also say that "phased and gradual" withdrawal of price subsidies - blamed by some for fuelling demand in emerging economies - is "desirable", the French news agency AFP said.

But India insisted there was no agreement to remove the subsidies altogether, China made clear it had no time frame for moving towards lower subsidies, and Japan's trade minister confirmed they had agreed only on the need to remove the subsidies, according to the BBC's Chris Hogg, in Tokyo.

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