Bye-bye gas subsidies

Could higher gasoline prices in China and India mean lower prices here in the U.S.?

NEW YORK (CNNMoney.com) — If gas were more expensive in China and India, would it be cheaper in the United States?

Dozens of countries in the Middle East and Asia have subsidies and controls that keep gas prices low to consumers. Many think that the government tinkering artificially fuels demand, imposing higher prices elsewhere in the world.


Let the price rise in those countries, the thinking goes, demand will fall, and global prices will come down too.

But in recent weeks, China, India, Indonesia, and Iran – countries where the government sets the price of gas – have all raised prices.

And now analysts disagree on what the impact will be. Some say that gas consumption – and worldwide oil prices – could actually go up.

CNN