Tales of desperate motorists across Asia

SINGAPORE – Motoring fanatic Dennis Lim drives his souped-up, 300-horsepower Subaru WRX sports car to work daily and does not mind paying for his passion, but his carefree gas-guzzling days could be numbered.

With benchmark crude past $70 a barrel and the ceiling on pump prices blown skyward by Hurricane Katrina in the United States, even affluent Asian consumers like Lim are feeling the pinch.

"The impact is actually very hard," the 28-year-old Singaporean business executive said after premium petrol prices in Singapore shot up to as high as $1.20 per liter, more than 20 percent higher than six months ago.

"If it keeps on going up, I will really limit my travelling. I will plan my trips," said Lim, who sometimes spends almost $500 a month on fuel.

In Manila, office clerk Ciriaco Toledo, 50, has bought a 112cc Japanese scooter to commute from his home about 30 kilometers (20 miles) outside the capital to his office in the Makati financial district.

The tiny engine allows Toledo – who earns in a whole month what Singaporean motorist Lim spends on petrol – to spend only a fifth of what he used to pay for the fuel for his beloved old jeep, which he has sold.

"We don’t buy new clothes now and spend all the money on food," said the father of two. "We only buy clothes on special occasions, like Christmas."

Oil prices have been rising almost weekly in the Philippines for more than a month, triggering fare increases, and the leftist labor group Kilusag Mayo Uno (KMU) is planning strikes this month against rising pump prices.

Asians, rich and poor alike, are already being affected by the monster storm that pounded oil-producing regions in the southern United States early last week.

Utility and transport firms are planning to raise charges, airlines are likely to jack up fuel surcharges ahead of the year-end holidays, and unions are bracing themselves for strikes, layoffs and factory shutdowns.

In Indonesia, the local currency, rupiah, slipped to as low as 11,800 to the dollar before finding some traction to recover at 10,800-10,950.

Indonesia is a member of the Organization of Petroleum Exporting Countries (OPEC) but is a net oil importer. Subsidized local oil prices are wreaking havoc on public finances and exerting pressure on the rupiah, but ending subsidies could set off social unrest.

"We will make some adjustments to fuel prices, while protecting the poor," President Susilo Bambang Yudhoyono said at a business conference recently. "I have every confidence that we will overcome this quagmire."

Hope might also come in the form of supply intervention by OPEC, which warned that current crude prices do not reflect market fundamentals. Some analysts were also saying the oil price "bubble" will have to burst.

Even in oil-rich Brunei, which is enjoying a windfall from high energy prices but heavily subsidizes local fuel, Energy Minister Yahya Bakar called on people to reduce energy consumption.

"Bruneians from all walks of life must get involved in every aspect of energy conservation," Bakar said as he announced further oil exploration projects to satisfy world demand for black gold.

In Australia, national airline Qantas last week increased the fuel levy paid by passengers for the fifth time in barely a year and other airlines have indicated they could do likewise. Petrol prices are also expected to go up.

In Japan, oil distributors have announced they will raise wholesale petrol prices by about two yen (18 cents) per liter this month, while Japan Airlines (JAL) said it is considering raising domestic air fares early next year.

Last month, JAL, Asia’s biggest carrier, extended a surcharge on international routes through the end of March.

In Pakistan, the government has not passed on the impact of rising crude prices to the public.

India’s government has also held back passing on the spike in international oil prices since June to the domestic market, prompting a warning by the central Reserve Bank that the state’s fiscal burden could increase and investors in public sector oil companies could be hurt.

In Malaysia, whose national oil company Petronas is enjoying record profits, Deputy Prime Minister Najib Razak said the government may raise domestic oil prices if crude costs continue to soar.

"No government in the world for that matter can maintain the current price if the world’s oil price continues to surge," he was quoted as saying by the official Bernama news agency.

Vietnam’s government, which has raised fuel prices three times this year, has said it might increase them further if crude prices keep rising. Vietnam Airlines and Vietnam Railway have not received permission to raise fares.

China’s subsidized oil pricing structure helps mitigate the impact of surging global crude prices. However, sectors that use imported oil, such as petroleum refiners and airlines, are feeling the pinch.

Airlines have raised prices several times this year and at the beginning of August added a fuel tax of 20 yuan ($2.47 ) for journeys of 800 kilometers (500 miles) and under, and double for distances above that figure.

Due to the high cost of domestic fuel, carriers are likely to increase ticket prices by another 10 to 20 percent during the peak travel season of September and October, airline executives said. –AFP