Governments across Asia are taking action to curb rising fuel costs as the US-Israel conflict with Iran pushes oil above $100 a barrel.
Fuel price caps in Asia aim to shield consumers from rising oil costs
The spike comes amid fears of prolonged disruption to Middle East energy supplies, with Iran naming Mojtaba Khamenei as Supreme Leader, Gulf nations halting production, and fresh airstrikes escalating tensions. East Asian economies, heavily reliant on oil transported through the Strait of Hormuz, are moving quickly to protect consumers.
South Korea’s President Lee Jae Myung said his government would “swiftly implement” a petrol price cap to ease what he called a “significant burden” on the economy. Seoul is also ready to expand its 100tn won (£50bn; $67bn) financial stabilisation programme if needed, while ensuring transparency and fair pricing and warning oil firms against exploiting the crisis.
In Thailand, Prime Minister Anutin Charnvirakul urged citizens not to stockpile fuel and announced a 15-day diesel price cap, after queues formed at petrol stations amid shortages. Vietnam is considering temporarily removing taxes on fuel imports, while the Philippines has introduced energy-saving measures, including a four-day workweek for most public offices. Universities in Bangladesh have been closed to conserve energy.
US President Donald Trump dismissed short-term oil spikes as “a small price to pay” for countering Iran’s nuclear threat, while Energy Secretary Chris Wright predicted prices would ease once Tehran’s ability to target tankers is neutralised.
Experts say reopening the Strait of Hormuz is critical for stabilising Asia’s energy costs. Roc Shi, from the University of Technology Sydney, described the effective closure as “a supply chain crisis, not just a price spike,” particularly impacting Japan and South Korea. OCBC strategist Christopher Wong added that oil prices could fall if tensions ease, but further disruptions in production or shipments could push costs even higher.
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