The Asian Development Bank cautioned Asian governments to avoid broad fuel subsidies and excise duty cuts, saying higher crude oil prices could widen fiscal stress. It recommends targeted cash transfers for vulnerable households and stronger investment in green energy. The ADB also urges central banks to track inflation expectations carefully before tightening monetary policy.
IMF Asia Pacific director Krishna Srinivasan urged Asian governments to keep fiscal discipline and avoid broad fuel subsidies, even as the Iran war tightens global energy supplies. With shortages linked to a logistics logjam at the Strait of Hormuz and rising oil pressures, he cautioned countries to preserve budget room for future shocks rather than rushing into costly coverage.
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As crude prices whipsawed amid West Asia tensions, India’s retail fuel rates stayed largely unchanged, unlike other countries and even private retailers. The divergence casts doubt on the credibility of “market-linked” pricing, and renews calls to decontrol oil prices while replacing broad cross-subsidies with targeted DBTs for needy households.
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