Record oil prices to hurt Asian Q4 gasoline demand
By Jiwon Chung
SINGAPORE (Reuters) - Record oil prices are set to hurt Asian gasoline demand in the fourth quarter, as major importing nations will come under pressure to conserve fuel or roll back retail subsidies that prop up demand.
Benchmark Asian gasoline prices at around $79.60 a barrel are still $15 away from a record hit in September 2005, but analysts expect market prices for the motor fuel to climb following crude's record over $80 this week.
Industry sources said on Thursday they expect Asia's top gasoline importers Indonesia and Vietnam, which are scheduled to announce their import programme for the next month or quarter within the next two weeks, to request smaller volumes.
"I think the governments that subsidise gasoline will take some kind of action, if oil prices stay at this level," said Tony Regan, Singapore-based consultant at Nexant, referring to Indonesia and Vietnam.
Malaysia, a crude exporter but gasoline buyer, said on Thursday it has not decided whether to raise government-set fuel prices, after promising only in May -- when U.S. oil prices were around $65 -- that it would not raise prices.
Gasoline demand in Indonesia, Asia's biggest gasoline importer, had recovered this year from a demand slump after the country nearly doubled prices in October 2005 to ward off a currency crisis caused by costly oil imports hurting its budget.
It purchased 43 percent more gasoline in the first nine months of this year, versus the same period in 2006.
"It is possible for those countries to start rationing gasoline supplies in the near future as they need to take some action to show that they are doing something," Regan added. Continued...















