Regional Governments Act on Energy Security Amid Global Market Pressures

Several governments across Asia have announced or implemented measures aimed at conserving energy, stabilizing domestic fuel markets, and securing supplies. These actions follow a period of increased global oil prices and reported supply chain concerns.

The International Energy Agency was cited in one report as stating that recent events had caused the "largest supply disruption in the history of the global oil market."

Regional Overview of Government Measures

Governments have employed a range of policy tools, including administrative orders, fiscal adjustments, and strategic reserve management.

South Korea

• President Lee Jae Myung announced plans to introduce a system to cap domestic fuel prices, a measure not used in the country for nearly three decades.
• The government stated it would seek energy sources from suppliers not reliant on transit through the Strait of Hormuz.
• Officials indicated a readiness to expand an existing 100 trillion won ($95.6 billion) market-stabilization program if necessary.

Japan

• Oil prices in Japan rose over 25 percent, reaching levels not seen since mid-2022.
• Prime Minister Sanae Takaichi stated the government was considering steps to prevent gasoline prices from becoming "intolerable for the public," potentially including the use of strategic reserves. She ruled out overhauling the draft fiscal 2026 budget for this purpose.
• Akira Nagatsuma, a member of the opposition Centrist Reform Alliance, reported that the government had instructed a national oil reserve storage site to prepare for a potential crude oil release. The timing of any release was not specified.
• Finance ministers from the Group of Seven (G7) nations, including Japan, expressed readiness to implement "necessary measures" in response to surging global oil prices.

China

• Sources familiar with the matter reported that Chinese authorities requested refiners to cease signing new fuel export contracts and to attempt to cancel existing commitments.
• This guidance was reported not to apply to jet fuel for international flights, bonded bunkering, or supplies to Hong Kong or Macau.

Indonesia

• The finance minister stated Indonesia would increase the allocated amount for fuel subsidies within the state budget.
• The country has budgeted 381.3 trillion rupiah ($32 billion) for energy subsidies and compensation to state-owned firms Pertamina and PLN.
• Deputy Energy Minister Yuliot Tanjung stated authorities were considering reviving a plan to launch a mandatory B50 grade of palm oil-based biodiesel sooner than planned due to surging crude prices. A decision has not been finalized.

Philippines

• President Ferdinand Marcos Jr. ordered a temporary four-day work week for selected executive branch offices to conserve energy. All government agencies were instructed to cut electricity and fuel consumption by 10 to 20 percent.

Vietnam

• The government announced the removal of import tariffs on fuels to secure supplies. This measure is expected to remain in effect until the end of April.
• Citizens were encouraged to work from home and reduce vehicle usage.

Thailand

• The prime minister urged officials to use stairs instead of elevators. The country is utilizing its strategic oil reserve and employing price supports.
• Thailand's halt of some fuel exports was reported to have contributed to shortages in Cambodia.

India

• State-owned refiners, including Indian Oil Corp (IOC), raised the price of liquefied petroleum gas (LPG) cylinders for the first time in approximately a year.
• Indian Petroleum Minister Hardeep Singh Puri stated the federal government had absorbed over half of a recent global price increase to keep costs low for poorer households under a subsidy program.
• Indian foreign ministry spokesperson Randhir Jaiswal confirmed that India had received requests for fuel supplies from neighboring countries, including Bangladesh, Sri Lanka, and the Maldives.
• Two Indian-flagged tankers carrying gas supplies transited the Strait of Hormuz and arrived in India, according to Foreign Minister Subrahmanyam Jaishankar.

Pakistan

• The government increased petrol and diesel prices by 55 rupees ($0.28) per litre, which officials described as the largest single increase on record.
• Prime Minister Shehbaz Sharif announced schools would close for two weeks, with universities shifting to online classes. Government departments will face a 50 percent cut in fuel allowances for two months.
• The oil minister indicated fuel prices would be reassessed weekly.

Bangladesh

• The government announced the closure of all universities, bringing forward the Eid al-Fitr holidays as a measure to conserve electricity and fuel.
• The national oil company, Bangladesh Petroleum Corporation (BPC), implemented daily limits on fuel sales for most vehicles following reports of panic buying. An industrial economist stated the country was seeking alternative fuel sources.

Sri Lanka

• State institutions, schools, and universities moved to a four-day work week. Civil servants were advised to work from home where possible, and the private sector was encouraged to adopt a similar schedule.
• The government began fuel rationing, limiting private motorists to 15 liters of petrol or diesel per week. Officials stated current petrol and diesel reserves were projected to last nearly six weeks.
• Ceylon Petroleum Corporation (CPC) increased fuel distribution, releasing over 5 million litres on a public holiday. Police ordered stations to cease dispensing fuel into cans.

Nepal

• The country's primary oil company announced it would fill LPG cylinders to half capacity to extend existing stocks.

Context and Reported Challenges

Other reports referenced concerns about energy shipments transiting the Strait of Hormuz, a shipping channel for a significant portion of global crude oil and liquefied natural gas.

Analysts from the consultancy Eurasia Group identified Singapore, Thailand, South Korea, Pakistan, and Japan as being among the most affected countries in the region.

Analysts noted that while strategic oil reserves provide a temporary buffer, they do not increase overall supply. Mika Ohbayashi of the Renewable Energy Institute in Japan stated that fundamental supply difficulties remain unresolved.

The European Commissioner for Energy, Dan Jørgensen, stated the European Union was working on measures to reduce energy bills and help businesses and vulnerable citizens.