Morgan Stanley on Role of Subsidies in Oil Prices

"A reader forwarded me a Morgan Stanley fixed income research report wrap, which included a discussion of the role of gasoline and oil price subsidies in certain developing countries. The price gives an good overview of the role these defacto consumer price discounts have played, and argues that they will have to be cut back (India has already reached a crisis point on this issue). To invoke a newly-popular cliche, "the cure for high prices is high prices," and once these subsidizided customers are increasingly exposed to world price levels, their demand will fall."