Hong Kong: Fitch Ratings says that net oil bills have declined significantly for Asia-Pacific sovereigns amid dramatic declines in crude prices since 2013. Asia is the largest crude importer globally, with gross import volumes roughly equivalent to the rest of the world combined.
Fitch-rated sovereigns in Asia are all net oil importers, with the exception of Malaysia. Thailand, Korea, and Sri Lanka have experienced declines in their net oil bills in excess of 3.0% of GDP since 2013, the most significant in the region. Despite being Asia’s largest oil exporter, Malaysia’s net oil receipts rose slightly due to a rise in crude export volumes. Vietnam is the only country in the region to experience deterioration in its net oil bill.
Declines in net oil bills have translated into improvements in current-account balances among nearly all Asian economies that Fitch covers. Many countries have responded to lower oil prices by reducing energy subsidies. Indonesia, India, and Malaysia have experienced the largest decline in energy subsidies in recent years through policies that have either abolished or capped subsidies for diesel and gasoline.