Fuel Crisis Ripples Across Asia: Rationing, Price Caps and a Search for Alternatives
Soaring fuel prices are gripping Asia as the escalating conflict in the Middle East disrupts shipments through the vital Strait of Hormuz. From panic-buying to government intervention, countries across the region are scrambling to mitigate the impact on consumers and economies.
Bangladesh Imposes Fuel Rationing Amidst Panic Buying
Bangladesh moved to impose daily limits on fuel sales on Friday, March 8, 2026, after widespread panic buying and stockpiling threatened to deplete supplies. The country, which imports 95 percent of its oil and gas, restricted sales, limiting motorcyclists to a maximum of 2 litres per tank. The Bangladesh Petroleum Corporation (BPC) cited consumer behavior during times of crisis as the reason for the restrictions, noting a surge in purchases exceeding normal levels. Long queues formed at petrol stations in Dhaka as the restrictions took effect.
South Korea Caps Domestic Fuel Prices
In a move not seen in nearly 30 years, South Korean President Lee Jae Myung announced the implementation of a maximum price system on petroleum products on Monday, March 9, 2026. The decision comes as the crisis is seen as a significant burden on the country’s trade-dependent economy. South Korea is also exploring alternative energy sources to reduce reliance on shipments through the Strait of Hormuz. A 100 trillion won ($96 billion) market stabilization program is prepared for expansion if needed.
Japan Considers Reserves and Price Controls
Oil prices in Japan surged more than 25 percent on Monday, reaching levels not seen since mid-2022. Prime Minister Sanae Takaichi indicated the government is considering measures to avoid fuel prices becoming “intolerable” for the public, potentially tapping reserves. The government is evaluating options while avoiding overhauling the draft fiscal 2026 budget or compiling a stopgap budget.
Sri Lanka Faces Familiar Fuel Shortage Fears
Sri Lanka is experiencing renewed concerns about fuel shortages, reminiscent of the crisis that gripped the nation in 2022. Long queues have formed at fuel stations despite assurances from authorities that sufficient diesel and petrol stocks are available for the next 35 and 37 days, respectively. The government has ordered stations to stop dispensing fuel into cans and warned against hoarding. The country imports most of its fuel from Saudi Arabia and the UAE via the Strait of Hormuz.
Philippines Shortens Function Week, Conserves Energy
President Ferdinand Marcos Jr. Ordered a temporary implementation of a four-day work week for selected government offices on Friday, March 7, 2026, as part of energy conservation efforts. Government agencies will also cut electricity and fuel consumption by 10 to 20 percent.
Pakistan Raises Fuel Prices, Implements Austerity Measures
Pakistan increased petrol and diesel prices by 55 rupees ($0.28) per litre on Friday, March 7, 2026 – the largest increase on record. Prime Minister Shehbaz Sharif announced austerity measures, including school closures for two weeks, a shift to online university classes, and a 50 percent cut in fuel allowances for government departments. 60 percent of official vehicles, excluding essential services, will be taken off the road.
Indonesia Boosts Subsidy Budget, Considers Biodiesel
Indonesia has increased its energy subsidy budget to 381.3 trillion rupiah ($32 billion) to maintain affordable fuel and electricity prices. Authorities are also considering reviving plans for a B50 biodiesel blend – a mixture of 50 percent palm oil-based biodiesel and 50 percent conventional diesel – to combat rising oil prices.
The Strait of Hormuz: A Critical Chokepoint
The current disruptions highlight the strategic importance of the Strait of Hormuz, a narrow waterway between Oman and the UAE on one side and Iran on the other. The recent incidents, including reports of Iranian transmissions warning ships against passage, have effectively closed the strait, sending shockwaves through global energy markets. The situation remains fluid, with potential for further escalation.
What is the impact of a prolonged closure?
A prolonged closure of the Strait of Hormuz could have severe consequences for the global economy, leading to significantly higher oil prices and potential supply shortages. The region is a critical transit route for approximately 20% of the world’s oil supply.
Are there alternative routes?
While alternative routes exist, they are limited in capacity and would require significant time and investment to expand. These include pipelines and longer sea routes around Africa.
What are countries doing to mitigate the impact?
Countries are employing a range of strategies, including releasing strategic petroleum reserves, seeking alternative suppliers, implementing energy conservation measures, and providing financial assistance to consumers.
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