Soaring gasoline prices are fanning inflation and causing a headache for governments and central banks worldwide. In countries with elections coming up, they’re an extra headwind for the incumbents.
While the U.S. mid-terms in November are the prime example of fuel prices feeding into the political sphere, upcoming votes in Asia may also be affected. Voting is already underway in Indian state elections and South Korea holds a presidential poll in early March. There’s also an Australian general election and a contest for the upper house in Japan in the next few months.
Oil’s relentless march toward triple figures has already prompted political action from incumbents. India cut retail taxes on gasoline and diesel in November and there’s been an unofficial freeze on prices since. South Korea enforced a temporary 20% drop in fuel levies in October through April, which may be extended, while Japan is subsidizing refiners to make motor fuel.