Gas stations running out of supply, people rushing to buy, flight reductions! The global energy crisis is worsening, and many countries are implementing emergency measures.

The global energy shockwave triggered by the Iran war is spreading at an unprecedented speed, extending from the Asia-Pacific to Africa and Europe. Gas stations are running out of supplies, the public is lining up to purchase fuel, and mass cancellations of flights are occurring in succession. Governments in multiple countries are forced to rapidly roll out emergency intervention measures within days, and a global game of demand destruction and policy response has fully commenced.

In the latest developments, Australian Prime Minister Anthony Albanese announced a three-month halving of the fuel excise tax to address the situation of gasoline prices reaching a 20-year high; Indian Finance Minister Nirmala Sitharaman imposed heavy taxes on diesel and aviation fuel exports while lowering domestic retail fuel taxes; major airlines in Vietnam announced significant capacity cuts starting in April; Poland plans to reduce fuel taxes and set a price cap; the Czech government is considering controlling the retail profit margins of gas stations.

The pressure in the energy market has directly transmitted to the transportation sector. According to Bloomberg, European aviation fuel prices have risen by 114% since the outbreak of the war, with Singapore fuel prices climbing by about 140%. UBS warned that aviation fuel shortages in Asia are leading to more flight cancellations, with Vietnam Airlines and Air New Zealand both announcing cuts to certain flights. Data compiled by Goldman Sachs previously indicated that Asia is the region most concentrated in this wave of demand destruction; analysis from the commodity team at JPMorgan shows that the shockwave originated in Asia, subsequently affecting Africa and Europe, and ultimately reaching the United States.

Energy consulting firm Wood Mackenzie warned that if the average price of Brent crude oil remains at $100 per barrel for four months, the fiscal shock to India will amount to approximately 0.7% of its GDP; Vietnam’s special subsidy fund is expected to be depleted by early April, and a similar fund in Thailand has already fallen into deficit, with some Asian governments potentially facing fiscal limits very soon.

Asia: Panic Buying Spreads, Gas Stations Running Dry

Australia is one of the most closely watched economies in this crisis. Reports indicate that one in every seven fuel retailers in New South Wales has experienced at least one type of fuel shortage; an independent gas station in Cairns, Queensland, has run out of unleaded gasoline, with diesel prices rising by 85% compared to pre-war levels. Diesel in Sydney once surged to 314.5 Australian cents per liter, hitting a record high, with hundreds of gas stations across the country reporting at least one type of fuel shortage this week.

Peter Khoury, a spokesperson for the National Roads and Motorists’ Association (NRMA), stated that the shortages are mainly due to panic buying behavior rather than an overall reduction in supply—“people are hoarding fuel in gas cans and storing it in their garages,” and freight companies are instructing drivers to “fill up as soon as they see diesel, even if it’s just half a tank.” Prime Minister Anthony Albanese’s tax reduction plan is expected to lower the price of fuel by about 26 Australian cents (approximately $0.18) per liter, with Treasurer Jim Chalmers estimating the total cost of related measures to be around AUD 2.55 billion, which will reduce the CPI by approximately 0.5 percentage points.

The situation in Vietnam is equally severe. According to Bloomberg, Vietnam Airlines will suspend seven domestic routes starting April 1 and plans to cut flights by 10% to 20% each month in the next quarter, with domestic flight cancellations potentially reaching 26% and international cancellations up to 18%; low-cost airline VietJet Air plans to reduce overall capacity by 18% in April; Bamboo Airways will cut its daily flight numbers to 15 to 17 flights. Over 80% of Vietnam’s crude oil imports come from the Middle East, and the government has urgently frozen part of the fuel taxes, effective until April 15.

Government Intervention Intensifies: Export Restrictions, Tax Adjustments, and Price Controls

Under the high pressure of supply chain disruptions, governments are rapidly expanding their policy toolbox.

India’s response measures are representative. According to Bloomberg, Finance Minister Nirmala Sitharaman announced a tax of 21.5 rupees (approximately 23 cents) per liter on diesel exports and a tax of 29.5 rupees per liter on aviation fuel exports, while simultaneously lowering domestic gasoline and diesel taxes by 10 rupees per liter. Emkay Global Financial Services economist Madhavi Arora estimates that the government’s annual fiscal revenue loss from just the tax cuts could reach approximately 1.55 trillion rupees (about $16.4 billion). Liquefied petroleum gas and liquefied natural gas have previously experienced severe shortages, leading to long lines outside gas stations. Meanwhile, several key states are about to hold elections, further increasing the policy pressure on the Narendra Modi government.

Japan is approaching the issue from the perspective of its energy structure. According to Reuters, the Ministry of Economy, Trade and Industry (METI) will temporarily lift the 50% capacity utilization limit on inefficient coal-fired power plants starting April 1 for one year, which is expected to reduce liquefied natural gas consumption by about 500,000 tons annually. Japan imports about 4 million tons of liquefied natural gas through the Strait of Hormuz each year, accounting for approximately 6% of its total imports. Trade Minister Ryosei Akazawa stated that strategic oil reserves will be prioritized for domestic refining companies, and although the Philippines and Vietnam have sought assistance from Japan, there are currently no plans to provide reserves directly to neighboring countries.

In Thailand, the Ministry of Energy has required refineries to publicly disclose prices and inventory levels, strictly prohibiting sales above government-set prices. Thailand’s daily diesel demand has jumped from a pre-conflict average of 67 million liters to about 87 million liters, with panic buying being the main reason for the surge in demand. Even though the government has raised retail prices, there remains a subsidy of 19 baht (approximately 58 cents) per liter for diesel, and the special subsidy fund is running a deficit of about 38 billion baht.

Africa and Europe: Crisis Scope Continues to Widen

The external spillover effects of the energy crisis have extended to Africa and Europe. In Kenya, Vivo Energy, a subsidiary of the Vitol Group, has admitted to temporary shortages in some stores, primarily concentrated in remote areas. Martin Chomba, chairman of the Independent Petroleum Distributors Association of Kenya, stated, “Rural gas stations are hit the hardest—we have lost the channels to procure products at competitive prices,” with about 68% of gas stations being non-franchised, and “a significant number” unable to obtain regular supplies. Finance Minister John Mbadi announced that the oil development tax will be used to stabilize oil prices, but admitted that if the war continues, the situation will escalate to an “emergency state.”

In Europe, according to Bloomberg, Czech Prime Minister Andrej Babis openly criticized the two largest fuel distributors in the country for charging “outrageous” prices, specifically calling for Poland’s Orlen SA and Hungary’s Mol Nyrt to immediately lower prices, stating that they “should not profit from this Iran crisis.” Finance Minister Alena Schillerova stated that the government is seriously studying the implementation of controls on retail profit margins at gas stations. Both companies have stated that their prices are determined by the market and international oil prices.

Polish Prime Minister Donald Tusk announced plans to cut the value-added tax and excise tax on fuel, setting a daily retail price cap that adjusts dynamically with wholesale prices, expecting a reduction of 1.2 zloty (approximately $0.32) per liter. The government also plans to impose a windfall tax on refining companies, which will directly impact Poland’s energy giant Orlen SA—after the announcement, its stock price dropped by as much as 6.7%. According to data from the European Commission, gasoline prices in Poland have risen by 22% since the outbreak of the Iran war, and diesel prices have surged by 40%, both significantly exceeding the average levels in the 27 EU countries (approximately 15% for gasoline and 26% for diesel).

Fiscal Limits Approaching: Subsidies Burn Faster, Policy Space Rapidly Narrowing

Wood Mackenzie noted in its research report that the scale of policy interventions by Asian governments in this round is unprecedented, but the fiscal cost of maintaining these measures is equally staggering. Price controls and subsidy measures across different regions are quite similar, essentially providing subsidies to consumers through various government mechanisms—Japan and Malaysia compensate refiners and fuel suppliers; India chooses to freeze retail prices and have state-owned oil companies initially absorb losses, with the central government intervening through tax reductions once the losses reach an unsustainable level.

Among countries facing the most fiscal pressure: Vietnam’s special subsidy fund is expected to be depleted by early April; Thailand’s similar fund has already fallen into deficit; Indonesia is at risk of breaching the 3% statutory fiscal deficit limit; if oil prices remain high for an extended period, the fiscal shock to India will amount to approximately 0.7% of GDP and 7.2% of government fiscal revenue. Wood Mackenzie points out that the expansion of fiscal deficits in many Asian countries has almost become a foregone conclusion.

The firm warns that “if oil prices remain high, some governments in Asia will soon hit fiscal breaking points.” Once the existing subsidy buffer is exhausted, more severe price adjustments or stricter demand-side controls will be unavoidable. The current intensive rollout of policies by governments may help stabilize livelihoods in the short term, but if the war continues, the pressure from the second phase of this global energy crisis will be much harder to resolve than the first phase.

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