Tuesday, August 19, 2008
Reference: Fuel subsidies can cost far more than you think, Bangkok Post, August 18, 2008
Fossil fuel consumption in 2007 shrank by about 1% in Europe and North America but overall consumption worldwide was up by more than 2% helped largely by rising consumption in developing countries such as China, India, and the ASEAN countries. The difference between the developed world and the developing world in this regard is due largely to the difference in the rate of economic growth and not due to fuel subsidies. In response to the most recent spike in the price of oil, developing countries have used various forms of subsidies as a short term measure to soften the blow and not as long term economic policy. Their overall economic impact is almost unmeasurable when compared with the enormous and structural agricultural subsidies in the West. It is a trite and overused economic truism that subsides benefit producers and not consumers, and it is wrong in this instance for the rich countries to use this lame argument to blame the poor countries for the high price of oil (Fuel subsidies can cost far more than you think, Bangkok Post, August 18, 2008).