Asian Fuel Subsidies Distort the Energy…

Asian leaders contemplating the high price of oil and related energy need to ask how much they themselves are to blame this for this state of affairs. At US$135 a barrel, oil may be in a bubble but do not expect prices to fall back much below $100 – its level at the start of 2008 – if shortsighted Asian government policies continue to be so important at the margin where world prices are set, sustaining demand at a level far above that which it would be in market forces were left in charge.

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