Australian Finance Minister Lindsay Tanner said Sunday the government wanted Asian countries to drop their fuel subsidies to ease rising petrol prices. Canberra argues that the subsidies distort demand for petrol and push up the cost of fuel and that without them, demand would lessen and lead to lower prices.
Tanner said the idea of scrapping the subsidies was "very sensible" and that the Labour government of Prime Minister Kevin Rudd would push for their removal. "We can put pressure on other countries to remove subsidies that do distort choices that people make and do reduce the extent to which they can move into other technologies," Tanner told Australian television.
"It's important for Australia to put pressure on these other countries, but of course we can't force them to make those changes."
Tanner said that while Australia was benefiting from Asia's rapid development through increased demand for energy and mineral resources, at the same time the region was also demanding more petrol. "That's putting huge upward pressure on petrol prices and outstripping demand. And of course we have to pay those global petrol prices as well," he said.
Tanner's comments come after Rudd last week suggested applying a "blowtorch" to force the OPEC oil cartel to increase production to relieve prices.