COUNTRIES across Asia are weighing up work-from-home policies and stimulus measures enforced during the Covid pandemic, as they scramble to respond to global fuel shortages triggered by the Iran conflict.
Asia is at the frontline of the fuel crisis, buying over 80% of the crude that transits the Strait of Hormuz, which has been almost totally blocked by Iran since the conflict broke out on Feb 28.
No country in the region has enforced work-from-home measures yet, but some have said they are on the table.
“I think it is a good idea,” South Korean Energy Minister Kim Sung-whan said on Tuesday when asked about an International Energy Agency recommendation for people to work from home.
IEA, which agreed to a record release of around 400 million barrels of oil from strategic stockpiles to deal with the crisis, has outlined proposals to ease oil price pressures such as working from home and avoiding air travel.
IEA executive director Fatih Birol repeated those calls at a conference in Sydney this week.
“There were real-life tests, such as after the Russian invasion of Ukraine, European countries adopted these measures, and it was announced by the European governments. It helped them a lot to go through these difficult times without Russian energy ... but keeping the lights on,” Birol said.
Industrial powerhouse South Korea on Tuesday launched a public campaign asking people to cut shower time, charge phones during the day and run vacuums on weekends.
The Philippines, which relies heavily on Middle Eastern oil for its energy needs, shortened the work week in some government offices earlier this month.
President Ferdinand Marcos declared a state of national energy emergency, saying the conflict poses an “imminent danger” to the country’s energy supply.
Pakistan closed schools for two weeks and said office workers would work more from home.
Sri Lanka declared a public holiday every Wednesday to help make its fuel supplies go further.
Singapore, an Asian financial hub, urged people and businesses to switch to energy-efficient appliances, use electric vehicles and set the temperature higher on their air-conditioners.
Thai Prime Minister Anutin Charnvirakul ordered bureaucrats to suspend overseas trips, set air-conditioning temperatures above 25˚C, avoid suits and ties, use stairs instead of elevators, and work from home.
Some countries have turned to stimulus measures as rising fuel costs bite into household budgets.
The Japanese government said on Tuesday it plans to tap ¥800bil (RM19bil) in reserve funds to finance subsidies aimed at keeping petrol prices at about ¥170 (RM4.20) per litre on average. The measure would cost as much as ¥300bil (RM7.4bil) per month.
New Zealand said on Tuesday that it would provide temporary financial support of NZ$50 ($29.30) every week from April for low-income families.
In neighbouring Australia, hundreds of petrol stations are running dry from panic buying and shortages, which are acutely hitting the remote regional areas of the vast continent.
The centre-left government introduced legislation in the parliament to double penalties for fuel price gouging.
Some Asian countries have also released petrol and diesel from domestic reserves, and temporarily loosened petrol and diesel quality standards to boost supply.
But the glaring contrast with the pandemic is that central banks are not rushing to cut interest rates. In fact, they are mulling hikes.
During the pandemic, demand collapsed as many economies were essentially shuttered for health reasons, so policymakers responded with massive stimulus.
Investors expect Japan, Britain and Europe will all raise rates in coming months, and pressure on Asian economies may be even more acute as their currencies slip against the dollar.
“Central banks face a classic policy dilemma when oil prices surge – inflation rises but growth might weaken,” Jennifer McKeown, chief global economist at Capital Economics, said last week.
“The right response depends crucially on why oil prices are rising, how persistent the shock is, and whether inflation expectations are at risk.” — Reuters
