High oil prices hurting consumers, says IEA
Major emerging Asian economies such as India and Indonesia have been hit hard this year by rising crude oil prices, which despite falls this month are up by around 15 percent since the start of 2018.
Fuel import costs have been pushed up further by a slide in emerging market currencies against the dollar, denting growth and even triggering protests and government fuel price controls in India.
“Many countries’ current account deficits have been affected by high oil
rices,” IEA chief Fatih Birol said at an energy conference in Singapore. “There are two downward pressures on global oil demand growth. One is high oil prices, and in many countries, they’re directly related to consumer prices. The second one is global economic growth momentum slowing down.”
The effect of high oil prices will be compounded in Southeast Asia as demand is rising fast but production is falling, resulting in the region becoming a net importer of oil, gas and coal, Birol said. Despite the possibility of a slowdown, Birol said the general outlook for fuel consumption was for continued growth. ■