They are worrying about their balances of payments and are concerned about higher inflation as increasing prices are passed on to the customer, analysts said yesterday.
Compared with 1995, crude prices this year are nine to 10 per cent higher, said former OPEC secretary general Subroto.
The higher prices will certainly put pressure on the balance of trade and balance of payments of consuming countries, Subroto, who now heads a private energy think-tank in Indonesia, told Reuters.
Vishvanath Desai, the Asian Development Bank's energy industry director, said the impact of oil prices was declining thanks to improved energy efficiency, conservation and the use of alternative fuels.
In the early 1980s, when oil prices were very high, countries here paid 30-40 per cent of their export earnings to import oil, Desai said. But today, nobody has to pay more than 15-20 per cent at the most.
Benchmark Brent crude prices jumped in early September with the explosion of tension between the United States and Iraq to a post Gulf War high of $24.39 a barrel. At the end of August, it was $18.63 a barrel. Now, as tensions ease, it is $22.15.
Subroto said he expected prices to remain high until the end of the year because a United Nations/Iraq oil deal has been put on hold because of Iraq's incursion into northern Kurdish areas.
Baghdad had been due to sell oil worth $2.0 billion over six months to pay for food and medicines as an exemption to an embargo resulting from the 1991 Gulf War. Such sales would have pushed crude prices down.
How long oil prices will stay high is of special interest to Japan. Official figures show its August crude import bill rose 53.8 per cent from a year earlier, mainly due to higher prices.
Crude oil made up 8.9 per cent of overall imports last year.
It is a big chunk and we are keeping very careful watch over the global crude oil trade and price movements, a finance ministry official said.
Economists said the price rise could deepen South Korea's snowballing trade deficit and spiralling inflation. Crude imports account for more than eight per cent of its imports
