Uprisings and revolutions used to begin with bread riots. The prices of basic foodstuffs, and a regime’s ability to manipulate them, could determine the political fate of a country.
Today, the fulcrum-point of political instability and demagoguery is found not at the boulangerie but at the gas pump.
In Zimbabwe this week, at least 12 people were killed by police in fuel riots that seemed to have triggered a new period of political instability there. In Mexico, at least 96 people were burned to death last week when a leaking gasoline pipeline exploded; they had been scrambling to steal buckets of fuel amidst a political crackdown on gas supply shortages and widespread fuel theft. And in France, Emmanuel Macron’s government is scrambling to recover after being forced to slash diesel prices in the wake of violent riots late last year by a new right-wing movement, the yellow vests, who oppose fuel taxes and the environmental policies behind them. In Canada, Ontario’s premier pledged to keep gas prices artificially low to avoid similar ecological taxes; others seem poised to follow.
Last year, major fuel-price protests or riots broke out in Russia, Serbia, Croatia, Bulgaria, Nepal, India, Malaysia, Brazil, China, Egypt, South Africa, Kenya, Burkina Faso and Haiti; most had serious political repercussions. This year, as global fuel prices rise again, an even longer list are poised for petro-instability.
As the leaders of most of those countries know, mismanaging fuel-pump anger can be politically lethal. Brazil’s terrifying extreme-right President Jair Bolsonaro came to office in October in good part because the country lived through months of fuel protests which effectively shut down the country; like many strongmen, he claimed he could fix the problem (the previous government had eliminated taxpayer-funded artificial caps on fuel prices). Pakistan and Zimbabwe both saw historic leadership changes following fuel unrest. Egypt’s 2011 Tahrir Square uprising grew out of fuel-price protests that had been mounting for months. Myanmar’s “saffron revolution” of 2007 was triggered by fuel-price rises, as was Nigeria’s period of political instability and violence in 2012.
This has led Naomi Hossain, a researcher with Britain’s Institute for Development Studies, to ask a key question in a paper last year: “Are fuel riots the food riots of the 21st Century?”
They certainly are. While bread riots have not utterly vanished (Sudan just endured them), the near-eradication of absolute poverty has removed a lot of people from extreme food vulnerability – and raised them into a precarious place, well below the middle class, where worries about food are replaced by worries about fuel for heating and transportation.
As Dr. Hossain and her colleagues found, what unites food and fuel protest movements are a “politics of provision” in which regimes attempt to manipulate voter groups by subsidizing their consumption of basic needs, often to a great, and ultimately unsustainable, degree.
Subsidizing consumption of goods (rather than, say, incomes) is never a good idea – it redistributes income from the less wealthy (who pay a higher share of taxes to support the subsidies) to the more prosperous (who buy more, so reap the most savings), and it wastes major government resources in the most unproductive ways.
And if it’s a bad idea with food, it’s a terrible idea with petroleum – at a moment when the world’s greatest need is to sharply reduce the burning of fossil fuels, scores of countries are still using tax revenues to make them artificially cheaper, often to a great degree.
A litre of gasoline at the pump ranges in price from the equivalent of $2.59 in Hong Kong to only three cents in Venezuela, as economists Michael Ross, Chad Hazlett and Paasha Mahdavi found in 2015 when they assembled a database of fuel prices, taxes and subsidies around the world: “No other commercial product appears to be subject to such divergent pricing policies." Countries such as Iran and Venezuela spend as much as 20 per cent of their national budget keeping fuel prices artificially low.
Other countries, including Canada, subsidize petroleum by handing money or tax breaks directly to petroleum producers. The International Energy Agency estimates that annual global fuel subsidies are at least $430-billion – more than four times what developed countries are spending on climate-change finance.
What really stands out, though, is that the countries that suffer riots, uprisings and revolutions are never the ones with very high gas prices (even France has lower pump prices than most European countries). It’s always the countries with artificially low petroleum prices – when they’re forced to cut back on their subsidies or start taxing fuel up to normal world prices, voters go nuts and extremist politicians seize the moment.
In other words, artificially cheap fuel and low taxes pave a path to unrest and demagoguery. The world will be safer and cleaner if we can keep fuel expensive.