A new mechanism to measure the impact of rising oil prices on Asia’s poor offers a sobering forecast. There is a clear threat to the region’s gains in reducing the numbers living poverty. Using 18 different indicators, the recently conceived Oil Price Vulnerability Index (OPVI) suggests that countries surveyed have been hit by varying degrees as the price of oil rose from around $22 per barrel in 2003 to over $80 per barrel in the years since. Last week, oil fetched a record high of $90.07 per barrel, leading to speculation that the $100 mark was a growing possibility.

The most vulnerable countries are those that have “low economic strength, low economic performance and high oil dependency,” states a report released on Thursday by the UNDP, which used the OPVI to confirm its region-wide assessment of how the continent’s poor are coping with the rise in fuel prices.

In South Asia, the worst off countries are Afghanistan, Bangladesh, the Maldives, Nepal, Pakistan and Sri Lanka. In South-east Asia, the list includes Cambodia, Laos and the Philippines. In the Pacific, they range from Fiji, Samoa, Solomon Islands to Vanuatu.

The moderately vulnerable countries, on the other hand, stretch from Bhutan and India on one end to Burma, Thailand, Vietnam, Indonesia, Papua New Guinea and Mongolia. What has saved these countries from being at the bottom of the barrel are the capacities of their respective economies to “absorb oil price shocks, performing better with high or medium gross domestic product and economic growth rates,” states the UNDP report, ‘Overcoming Vulnerability to Rising Oil Prices’. “a low reliance on oil or being a net exporter of oil.”

But such a distinction would pale if oil prices continue to remain high, consequently posing an unforeseen challenge to the region’s Millenium Development Goals (MDGS) described by the report as “the overarching goal to eradicate extreme poverty and hunger”. “The threat to the MDGs depends on the length of oil prices continuing to rise,” Nandita Mongia, the lead author of the report, said. “If the prices continue to rise over the next three to five years, then we are in big trouble.”

UNDP report on poor households in rural and urban China, India, Indonesia and Laos found that, “between 2002 and 2005, the households suffered some dramatic price increases, paying as a whole 74% more for their energy needs,” states the report. That included 171% more for cooking fuels, 120% more for transportation, 67% more for electricity and 55% more for lighting fuels.

The millions who have been forced “to climb down the energy ladder,” as the UN agency describes it, have been left with limited choices, prompting many households to be forced to stay in the dark. While the urban poor “tend to be worse off since they do not have the alternative of collecting fuel wood or biomass,” the rural poor are no better off, since they are “more vulnerable to higher prices for lighting fuels.”

For least developed countries like Nepal, the pressure has a bearing on the quality of life. “There has been an increase in the disparity between the rich and the poor,’’ said Posh Raj Pandey, member of the South Asian nation’s national planning commission. “This poses a critical threat to achieving our MDGs.” — IPS