21 prompted a number of Russian refineries to curb production or increase exports, contributing to acute gasoline shortages in many regions in early 2011 ( _Energy Economist_ 2011b). In response, Prime Minister Putin lifted the fuel quality standards on a temporary basis ( _Financial Times_ 2011) while simultaneously increasing the gasoline export tax sharply. The timeline for fuel quality standards was subsequently postponed for the third time since 2008, delaying the ban on Euro-2-compliant gasoline and diesel until the end of 2012 ( _International Oil Daily_ 2012b), or a full 13 years after Euro 3 standards came into effect in the European Union. The public pays indirectly through higher health costs arising from exposure to greater vehicular exhaust.

# **4. Steps to Reduce Oil Consumption**

Reducing oil consumption is one means of decreasing vulnerability to high oil prices. Fuel efficiency improvement, reducing nonessential oil use, and diversifying away from petroleum products can all help lower oil consumption. Where petroleum products are used for power generation, and to the extent that power shortages may require diesel power generation to make up for the shortfall, electricity conservation also contributes to decreasing vulnerability. Table A2.1 in Appendix 2 provides detailed information on energy conservation and diversification for each country.

# **4.1 Conservation**

Nearly all governments have energy efficiency improvement and conservation policies, programs, campaigns, or targets. The rigor of implementation, however, varies markedly from country to country.

China’s central government sets an ambitious target for reducing energy intensity per unit of GDP every five years and enforces it. Thailand and the Philippines have also been active. Thailand has had energy saving-campaigns for more than two decades. The Philippines has issued a series of administrative orders designed to reduce energy consumption. Many of these measures have been driven by rising energy prices. Prospects of plentiful energy could change the incentive structure. For example, the government of Uruguay approved an energy efficiency improvement program in 2008 and formed a technical group to advise the public sector on the implementation of energy-saving measures, but disbanded the group in 2010 due to plentiful rainfall for hydropower generation (Business News Americas 2010a).

One of the most efficient ways to promote fuel conservation is through price signals: the higher the price, the more financially attractive are fuel-efficient appliances, vehicles, and equipment. High prices also discourage nonessential fuel use, such as nonessential car trips. The pricing policies of many study countries militate against this approach. In República Bolivariana de Venezuela, for example, the government has launched energy conservation campaigns, but sharply falling prices of petroleum products and electricity in real terms have presented serious barriers to such efforts.

The Department of Energy in the Philippines has been promoting automotive fuel conservation for more than a decade. There is a vehicle-use reduction program as part of national energy efficiency and conservation efforts. The department’s Web site posts fuel-saving driving habits for awareness-raising. There are also initiatives by oil companies to help drivers conserve automotive fuel. Total Jordan in June 2011 launched a program to help customers reduce fuel consumption by checking tires and pumping them if necessary to ensure that they are properly inflated, checking the engine oil level, and offering advice on how to reduce fuel consumption,