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Near East and Asia can reduce prices for oil
8 November 2007Many countries of Asia and the Near East adhere to the system of the state control over the prices. However, the rise in prices on oil in the world markets has led to that the oil refining branch started to work at a loss. Many petroleum refineries have reduced manufacture in order to avoid greater financial losses.
Now, as the prices for oil come nearer to a mark 100 doll./barr., the largest consumers of oil began to think of canceling grants to the fuel companies and to raise the prices for gasoline. In opinion of analysts, it should lead to reduction of demand and reduction of prices.
At present moment world demand for oil grows basically because of the countries selling transport fuel under very low prices (sometimes even below market). Therefore, in it not surprising that such policy renders strong influence on the world market. But till the recent moment leaders of the states of this region did not undertake any attempts to correct a situation.
However, last week 17-month’s resistance of China to increase in the prices for fuel has been broken. Authorities of China, whose demand for oil is one of factors of a rise in prices on fuel all over the world, have decided to raise the prices for gasoline in order to bring down demand. China has made a decision on increase in the prices for gasoline and diesel fuel on10 %, having reduced grants to the fuel companies. The prime minister of Malaysia has also achieved small increase in the prices. India plans to follow their example next week.
However, if Asia has reconciled to record-breaking high prices for oil, oil manufacturers in the Near East are going to provide the population with cheap fuel in order to promote economic growth. So, they sell fuel under the cost price, and any increase in the prices will lead to forcing of public excitement in this unstable region. So, the recent rise in prices on fuel in Indonesia has already led to mass protests. And in the beginning of this year in Myanma protests have poured out in extensive demonstrations.
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