Soaring diesel prices are straining governments across Asia as they seek to stave off inflation from rising energy costs and quell discontent from aggrieved truck operators that are seeing profits shrink.
The diesel market in Asia has tightened significantly as reduced supplies from China coincided with production disruptions and surging demand in economies rebounding from the pandemic. That’s led to rising prices, putting a strain on truckers and governments including Thailand, which this week rejected a plea for an extra fuel subsidy, saying it would cost as much as $7.3 billion a year.
The increasing cost of fuels such as diesel and gasoline is posing a challenge for authorities and central banks globally as they try and tackle inflation while supporting economic growth. It’s also exposing Asia’s fragile supply chain to more volatility as angry truck operators resort to strike action. Convoys of trucks clogged streets in Bangkok on Tuesday after the subsidy snub, while similar protests have been seen in Bangladesh and Indonesia.
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