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Fuel subsidies for some make oil more expensive for all - International Herald Tribune

JAKARTA, Indonesia: To understand why fuel prices around the world have soared over the last year, it helps to talk to the captain of a battered wooden freighter here.

He pays just $2.30 a gallon for diesel, the same price Indonesian motorists pay for regular gasoline. His vessel burns diesel by the barrel, so when the government prepared for a limited price increase this spring, he took to the streets to protest.

"If the government increases the price of fuel any more, my business will collapse totally," said the boat captain, Sinar, who like many Indonesians uses only one name.

From Mexico to India to China, governments fearful of inflation and street protests are heavily subsidizing energy prices, particularly for diesel fuel. But the subsidies -- estimated at $40 billion this year in China alone -- are also removing much of the incentive to conserve fuel.

The oil company BP, known for thorough statistical analysis of energy markets, estimates that countries with subsidies accounted for 96 percent of the world's increase in oil use last year -- growth that has helped drive prices to record levels.

by Fran (fran at eurotrib dot com) on Mon Jul 28th, 2008 at 03:32:20 PM EST
[ Parent ]
China's Gas-Guzzlers - dot.comments
Car ownership in China is exploding and the Chinese aren't buying hybrids, they're buying big SUVs and forming Hummer clubs, Ariana Eunjung Cha writes. She tells us that "China alone accounts for about 40 percent of the world's recent increase in demand for oil, burning through twice as much now as it did a decade ago." And the price of gasoline there is subsidized. <...>

Meanwhile, China, India and other nations have people who also want to have a nice ride and ask why they should be blamed for tough times at the U.S. gas pumps. As Cha writes, "...China bristles at criticism of its growing oil use, noting that per capita it will remain a small fraction of U.S. consumption for decades to come."

We'll start with book134, who wrote, "It is not China that is the problem in regard to the world's demand for oil... As is often the American inclination, we often blame others for our own self-induced problems because it is always easier to blame others than to change our own bad policies..."

BeijingStudent said, "Blaming us for the high price of oil is extremely unfair and injustice. Who really consumes most oil and gasoline in the world? Don't blame us . Look at your self. Stop to treat us like second class citizen."

hairguy01 lectured that "If America had used the last eight years to transition away from fossil fuels we would not be competing with the Chinese for the world's diminishing reserves."

jia123 shouted, "THE WHOLE CHINA IS USING LESS OIL THAN CALIFORNIA!"

Actually, the last dude should have written "China consumes less oil and diesel than California", while having only 2.8% the population of China -- but should have added that China is set to overtake California in oil and diesel consumption this year.

Cynicism is intellectual treason.

by marco (cowannar at gmail punkt com) on Mon Jul 28th, 2008 at 08:28:03 PM EST
[ Parent ]
not "oil and diesel".  sorry for the mistake.

Cynicism is intellectual treason.
by marco (cowannar at gmail punkt com) on Mon Jul 28th, 2008 at 10:31:40 PM EST
[ Parent ]
China is consuming 8 mb/d, and the US 20mb/d. So California is consuming, at most, 2-3mb/d, given its size (and the fact that its energy use per capita is actually significantly lower than the rest of the US, thanks to its much tougher regulation).

Again, China had better beware using these per capita numbers so much, because they're not looking good for China. China's carbon emissions per capita are already pretty much equal to those of a country like France.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Jul 29th, 2008 at 01:37:15 AM EST
[ Parent ]
The claim is that China is consuming less gas and diesel, not oil, than California -- although will likely surpass California this year.

In any case, your other point is well taken.  If the United States could make a significant commitment to unilaterally reducing fossil fuel consumption and carbon emissions -- and then making significant progress on that commitment -- then that would take away a huge swath of Chinese retorts to the effect that "You 'Westerners' have no right to pressure us, since you're still such unreconstructed dirty energy hogs."

Cynicism is intellectual treason.

by marco (cowannar at gmail punkt com) on Tue Jul 29th, 2008 at 02:09:04 AM EST
[ Parent ]
even in China, so it still cannot be right.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Jul 29th, 2008 at 04:38:00 AM EST
[ Parent ]
According to the California Energy Commission's State Alternative Fuels Plan - AB 1007 Report - Docket # 06-AFP-1,

California is the second largest consumers of gasoline and diesel fuels in the world, surpassed only by the United States as a whole. In 2006, Californians consumed an estimated 20 billion gallons of gasoline and diesel fuel on the state's roadways, an increase of nearly 50 percent over the last 20 years.

Doing the calculations, if you estimate 23 gallons of gasoline from one barrel of oil, that gives you:

20 billion gallons of gasoline in 2006
÷ (23 gallons of gasoline/barrel of oil)
÷ (365 days/year)

≈ 2.4 million barrels of oil/day in 2006

(i.e. exactly within your estimate)

In 2006 China's oil consumption was estimated at 6.3 million barrels per day.

(I assume that since then China's oil consumption has grown much faster than California's.)

Don't understand why or how that report states that California is the second largest consumers of gasoline and diesel fuels in the world, surpassed only by the United States as a whole.

Cynicism is intellectual treason.

by marco (cowannar at gmail punkt com) on Tue Jul 29th, 2008 at 06:02:00 AM EST
[ Parent ]
OK, this table from BP Statistical survey says that China consumes about 63% of its oil as 'light distillates':
Light distillates consist of aviation and motor gasolines and light distillate feedstock.
and 'middle distillates':
 Middle distillates consist of jet, heating kerosenes, gas and diesel oils (including marine bunkers).
Meaning that probably significantly less than 3 mil barrels per day was used as gasoline and diesel fuel. For the USA, it's about 75%.

So, China uses inordinate amount of oil as fuel, which skews the comparisons. California probably uses even less oil as fuel, further biasing the comparison based on population alone.

by Sargon on Tue Jul 29th, 2008 at 04:26:12 PM EST
[ Parent ]

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