As fuel prices rise to record highs, governments look for solutions – The Peninsula

As fuel prices rise to record highs, governments look for solutions – The Peninsula

London: Retail gasoline and diesel prices soared to record highs in many countries across the world this week, prompting governments from Brazil to France to consider pumping up subsidies or trimming taxes to shield consumers from the financial strain.

The moves reflect the economic and political risks governments see in the current energy spike, which has been driven by a rebound in fuel demand since the darkest days of the coronavirus pandemic and supply disruptions in the wake of Russia's invasion of Ukraine.

If prices keep rising - as many analysts expect - they could take a bite out of economic growth, force lower consumption, and in some cases trigger political unrest. In past years, rising fuel prices have caused deadly protests in countries including Kazakhstan, Iran and Zimbabwe.

"Sky-high energy prices for a prolonged period of time, risks of energy rationing, and ultimately a recession are growing by the day," Livia Gallarati, oil markets analyst at Energy Aspects told the Reuters Global Markets Forum.

Global benchmark oil prices were trading around $115 a barrel on Thursday, up from around $80 a barrel at the end of last year.

The United States on Tuesday imposed a ban on oil imports from Russia, the world's third