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Subsidies distort markets in Asia
Publication year - 2005
Publication title -
oil and energy trends
Language(s) - English
Resource type - Journals
eISSN - 1744-7992
pISSN - 0950-1045
DOI - 10.1111/j.1744-7992.2005.300813.x
Subject(s) - subsidy , scope (computer science) , balance of payments , economics , international economics , balance (ability) , petroleum , business , natural resource economics , economic policy , international trade , market economy , computer science , programming language , medicine , paleontology , physical medicine and rehabilitation , biology
As world oil prices remain high, some Asian countries are trying to cushion the blow to their poorer citizens by means of price controls and subsidies. Such measures, though, also serve to boost demand, driving up oil imports and exacerbating what are already in many cases severe balance of payments problems. The availability of cheap products in certain countries also encourages smuggling to more expensive markets. Some countries are finding they can no longer afford to subsidize high levels of demand and are therefore cutting back on petroleum imports. This in turn deprives their industries of fuel, putting their economic growth in peril and reducing still further their scope for paying oil subsidies.