IEA calls on China to reduce fuel subsidies

The head of the International Energy Agency (IEA) called on China to more quickly reduce subsidies on gasoline, diesel fuel and electricity. “In the short term it is very difficult to predict the oil price or the energy price, but we know in the longer term the cheap-energy age is over,” said Nobuo Tanaka, executive director. Tanaka said that while China has moved closer to market pricing of energy, including more frequent increases in retail gasoline prices, it continues to send “the wrong signal to the consumer” about energy costs. He said the IEA “strongly recommends to this government phasing out fossil fuel subsidies.” He said China could become the world leader in developing new energy sources, but it will have to “vigorously stick to its plans for the sector and “provide incentives to foreign companies to invest.” (April 21,2011)