From Asia to the Americas: Governments Race to Contain Energy Shock

A gas station in Los Angeles, California (AFP) 
A gas station in Los Angeles, California (AFP) 
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From Asia to the Americas: Governments Race to Contain Energy Shock

A gas station in Los Angeles, California (AFP) 
A gas station in Los Angeles, California (AFP) 

Governments worldwide are moving swiftly to contain the fallout from a sharp rise in energy costs, as global supply disruptions linked to the US-Israeli war on Iran rattle markets.

Surging fuel and electricity prices have prompted urgent steps to protect consumers and secure supplies, with mounting pressure on economies.

In Asia, India has taken measures to safeguard domestic supply, signaling a potential review of fuel exports if needed while prioritizing the local market. Requests from neighboring countries for fuel will be met only if surplus is available.

Authorities have also barred consumers connected to piped gas networks from using liquefied petroleum gas cylinders to manage demand. New Delhi has invoked emergency powers, directing refiners to maximize cooking gas output while cutting industrial supplies to meet household needs.

South Korea is boosting domestic energy production by easing restrictions on coal-fired plants and increasing nuclear utilization to 80 percent of capacity. It is also considering additional support vouchers for vulnerable households. To bolster supply, Seoul has begun implementing a ban on naphtha exports.

China has imposed restrictions on refined fuel exports as a precaution against domestic shortages, while allowing drawdowns from fertilizer reserves to support agriculture ahead of the spring season.

In Southeast Asia, Singapore will accelerate previously announced budget support measures to ease pressure on households and businesses. Indonesia aims to increase coal output, is weighing export taxes, and plans a biofuel program using a diesel–palm oil blend. Cambodia is importing additional fuel from Singapore and Malaysia to offset shortages.

Japan will temporarily ease restrictions to expand coal-fired power generation for one year and has called for coordination through the Group of Seven and the International Energy Agency to stabilize markets. It has also asked Australia to boost liquefied natural gas output.

Elsewhere, the Philippines has suspended wholesale spot electricity trading due to price volatility and supply risks, while activating a 20 billion peso emergency fund.

Vietnam is accelerating a shift to ethanol-blended gasoline, and Australia is drawing on fuel reserves to address shortages, particularly in rural areas, while warning of prolonged economic impacts. Authorities have urged reduced fuel use, including greater reliance on public transport.

Europe acts

European Union institutions have called for temporary measures, including cuts to electricity taxes and network charges, alongside direct support for households.

Italy is considering reducing fuel levies and may impose windfall taxes on companies benefiting from the crisis. Spain is preparing aid and tax relief for households and hard-hit sectors.

In Eastern Europe, Romania has cut diesel excise duties. Serbia has reduced fees on crude oil and extended a ban on exports of oil and derivatives. Slovenia has imposed temporary limits on fuel purchases.

Greece announced 300 million euros in support for fuel and fertilizers, along with reduced maritime transport costs to ease pressure on consumers and farmers.

Americas, Africa respond

In Latin America, Argentina has postponed fuel tax increases. Brazil has scrapped federal diesel taxes, imposed a levy on oil exports and unveiled plans to support fuel imports at the state level.

In Africa, South Africa has temporarily reduced fuel taxes, Ethiopia has increased subsidies, and Namibia has cut fuel levies by 50 percent for three months. Other countries are considering similar steps.

In the Middle East and North Africa, Egypt has capped prices for unsubsidized bread and raised procurement prices for local wheat to strengthen strategic reserves.

Other measures include tax cuts in North Macedonia, energy-saving steps in Mauritius, efforts to secure additional supplies in Sri Lanka and a possible reduction in value-added tax on fuel in Poland.

The breadth of these actions underscores the scale of the global response, as governments seek to cushion households and economies from rising energy costs. Amid persistent geopolitical tensions, policymakers continue to adjust strategies to manage supply risks and price volatility.



Philippines Says in Talks with Saudi Arabia for Oil Storage

Oil storage tanks in the Philippines (X)
Oil storage tanks in the Philippines (X)
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Philippines Says in Talks with Saudi Arabia for Oil Storage

Oil storage tanks in the Philippines (X)
Oil storage tanks in the Philippines (X)

The Philippines is in talks with Saudi Arabia, Russia and the United States to store oil in the country, its energy secretary said on Wednesday, in a bid to hedge against fuel price spikes driven by the Iran war.

The Southeast Asian nation, which imports nearly all its energy needs, also plans to increase diesel and gas-fired power output to make up for an estimated 60% decline in hydropower and 20% fall in solar output in the first half of 2027 due to the El Nino weather phenomenon, Secretary Sharon Garin told Reuters.

The Philippines is also in talks with ⁠Japan, Kuwait, the ⁠United Arab Emirates and Australia on oil storage, Garin said, as it looks to build stockpiles after the US-Israeli strikes on Iran in February disrupted supplies.

"If El Nino finishes in April, that's the time that summer starts for us. So this would be a prolonged pressure for us, which started with the oil crisis in the Middle East," Garin said on the sidelines of the Singapore International Energy Week conference.

Saudi Arabia announced this week an initial agreement to store Saudi crude in Singapore's rock caverns starting 2027.

The Philippines plans to build its first government-owned storage tank next year at Bataan to hold strategic oil reserves, Garin said, adding that the government has been working with Tokyo to build regional oil stockpiles, which would complement its national reserve.

Fuel inventories in the Philippines are currently at 55 days, up from a 15-day minimum requirement, Garin said. The government has 1 million barrels of oil stocks in private facilities, she added.

"We start with 1 million (barrels) and scale it up over the years with the objective of ⁠reaching 60 days," ⁠she said, adding that the volume will be split evenly between crude and fuels.

The country's average daily demand for petroleum products was about 78 million liters, or about 490,600 barrels, as of May, government data showed.


Mercedes to Cut More Jobs as Chinese Competition Bites

Mercedes-Benz CEO Ola Kaellenius gestures as he participates in a talk during the Berlin Global Dialogue 2026 in Berlin, Germany, 21 October 2026. EPA/CLEMENS BILAN
Mercedes-Benz CEO Ola Kaellenius gestures as he participates in a talk during the Berlin Global Dialogue 2026 in Berlin, Germany, 21 October 2026. EPA/CLEMENS BILAN
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Mercedes to Cut More Jobs as Chinese Competition Bites

Mercedes-Benz CEO Ola Kaellenius gestures as he participates in a talk during the Berlin Global Dialogue 2026 in Berlin, Germany, 21 October 2026. EPA/CLEMENS BILAN
Mercedes-Benz CEO Ola Kaellenius gestures as he participates in a talk during the Berlin Global Dialogue 2026 in Berlin, Germany, 21 October 2026. EPA/CLEMENS BILAN

Premium German carmaker Mercedes-Benz will restart a voluntary redundancy program and is in discussion with unions over further cost-cuts, its chief executive Ola Kaellenius said Wednesday after the firm warned on full-year profits.

"Germany accounts for roughly 15 percent of our sales, but two-thirds of our employees and structures are based here," Kaellenius told reporters and investors on an earnings call to present third-quarter results.

"To reduce our fixed costs further, we have decided to restart the severance program in Germany in December," he added, without giving a target number of job cuts.

German carmakers have struggled with cutthroat competition and falling demand in China, the world's largest car market, leading to painful adjustments at home.

Mercedes-Benz on Tuesday became the third of the big three German carmakers -- alongside Volkswagen and BMW -- to have issued a profit warning for the year, citing difficulties in China.

BMW aims to cut 8,000 jobs by the end of 2027 with its own voluntary redundancy program, and the Volkswagen Group plans to have cut 120,000 jobs globally by the end of the decade across its brands, which include Porsche and Audi.

Kaellenius said Mercedes-Benz could not give more detail since discussions were ongoing, adding that he was nevertheless pressing hard to get costs down.

"We will continue with determination to adjust the structures of the company to fit the revenue position of the company," AFP quoted him as saying.

Labor costs in China, Hungary, Romania and the United States are all lower than in Germany, Kaellenius said, adding that "eastern Europe as a whole is open to any industrialist looking to expand.”

Net profit for the third quarter rose almost 30 percent to 1.52 billion euros ($1.69 billion) even as overall sales declined 4.5 percent to 30.7 billion euros, largely the result of a collapse in China.

But Kaellenius said the company could not afford to abandon the Chinese market despite an intense price war driven by over 100 competing carmakers.

"If you're a global car company like Mercedes, there's not a play where you put China aside," he said.


Merz Invites Japan to Back Trade Alliance as China Asks Germany to Be ‘Rational’

German Chancellor Friedrich Merz attends the ISEAS 49th Singapore Lecture, in Singapore, October 27, 2026. (Reuters)
German Chancellor Friedrich Merz attends the ISEAS 49th Singapore Lecture, in Singapore, October 27, 2026. (Reuters)
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Merz Invites Japan to Back Trade Alliance as China Asks Germany to Be ‘Rational’

German Chancellor Friedrich Merz attends the ISEAS 49th Singapore Lecture, in Singapore, October 27, 2026. (Reuters)
German Chancellor Friedrich Merz attends the ISEAS 49th Singapore Lecture, in Singapore, October 27, 2026. (Reuters)

German Chancellor Friedrich Merz on Wednesday urged Japan to back a proposed global alliance to defend rules-based trade that he has been touting during a week-long Asia trip.

An alliance of "like-minded partners" ‌would help ‌countries resist the growing use of tariffs ‌and ⁠economic coercion, he ⁠told a business summit in Tokyo, according to prepared remarks.

"Should the rules of the global trading system be violated by others, or should economic coercion be employed, we could coordinate our actions within the alliance and present a united front," he said, an apparent ⁠reference to the US and China.

In ‌responding to Merz's proposal, ‌China said it hoped Germany and the EU would be "objective and ‌rational" and that it was committed to working ‌with all parties to maintain the stability of trade and supply chains.

Merz's initiative echoes calls by Canadian Prime Minister Mark Carney this year for the world's middle powers to ‌work more closely together to counter pressure from larger economies.

"If we move forward together, ⁠the ⁠question will no longer be whether we are 'on the menu' or 'sitting at the table'," Merz said, invoking a line used by Carney during his January speech.

"Because in that case, the restaurant itself belongs to us."

Germany sees China as both a massive trading partner and a strategic rival. Coinciding with Merz's visit, a report said Germany's trade deficit with Asia-Pacific is set to hit a record of nearly €146 billion ($163 billion) in 2026 as falling exports to China outweigh growing sales elsewhere in the region.