BEIJING: China, India and other nations that subsidize gasoline and diesel prices may be even less willing to raise prices than they were six months ago, aiding crude's ascent toward $130 even as demand deteriorates elsewhere. While Indonesia appears set to raise prices this month, the world's fastest-growing oil users show little inclination to reduce their subsidy programs and allow fuel prices to rise, as fighting inflation has become their top priority. That is bad news for oil consumers in the rest of the world, who face record crude costs partly as a result of demand growing unchecked in countries where pump prices have barely risen since mid-2006 - when crude was about $70 a barrel. Even as the fiscal burden of subsidies mounts with each record high oil price reached, two things have changed in recent months to stay the hands of policy makers. One is the advent of food-price inflation, which has taken over from energy as the world's biggest price threat. The other is the approach of major events - the Olympics in Beijing and Indian elections next year - that will make political leaders wary of making unpopular policy decisions. Indonesia, where demand fell by 20 percent when it doubled fuel pump prices in late 2005, said at a news conference Thursday that it would raise subsidized fuel prices by as much as 30 percent, although it did not say when the increase would come. But in countries with booming economies, or those earning large revenues from oil exports, there is less pressure to end subsidies than that faced by Indonesia. "The key for me is that the fiscal positions of all these players are relatively strong," said Jeff Brown, the chief economist for Facts Global Energy Group, in Singapore. "So they may be able to afford to retain low prices." The influence of fuel subsidies in driving oil prices higher grows clearer every day as rising costs erode consumption in North America, Europe and Japan. On Tuesday, the International Energy Agency once again cut its forecast for global oil demand growth this year, primarily due to record prices and the dimming U.S. economic outlook. But prices have barely risen in some of the fastest-growing oil-consuming nation, giving drivers in these countries little reason to cut back. Incremental consumption in China, India, the Middle East and Latin America - where most fuel prices are subsidized - now accounts for all of the energy agency's one million barrels per day global forecast for growth in oil consumption this year. Brown estimates that artificially low prices could be responsible for one-fifth or more of that annual growth, although quantifying the effect of low prices is tricky and inexact. For these countries, the irony of cheap fuel prices feeding into rising global crude costs is secondary to domestic considerations, analysts say - part of a global trend toward inward, protectionist policies across the commodities spectrum. Eventually, at least some of them will have to bow to higher prices, braving the risk of public protests in order to bolster government finances, temper demand growth and encourage greener energy policies. "It will not be easy to unwind them, but when such shifts do come, they could cause temporary downward shocks to demand," the energy agency said in its most recent report. In China, leaders have pledged for years to introduce the rigors of market pricing into its energy sector. Six months ago, with oil hovering around $90 a barrel, it looked like it might happen. But that hope has been dashed by rapidly escalating food prices, which have driven inflation to the highest level in 12 years just as Beijing prepares for its Olympic party. Instead of raising prices, which it has done only once in the past two years with a 10 percent increase last November, Beijing is cutting tariffs and handing out monthly subsidies to the oil majors Sinopec and PetroChina, whose shares have been hit hard by fears of lasting losses. "While implied subsidies are no longer tiny, they are simply not that big either," said a UBS analyst, Jonathan Anderson. "At current levels, the government could carry on for a very long time if it really wanted to." The Chinese budget deficit is equivalent to 0.6 percent of gross domestic product this year, so even a subsidy cost in the tens of billions of dollars is bearable, analysts say. With the Olympic Games approaching, refiners appear wary of deploying their usual pressure tactics for higher prices, like cutting sales to cause shortages. The situation is similar in India, where the fragile ruling coalition relies on the support of the Communist Party to maintain power, and is already thinking ahead to how high inflation rates could affect its chances in the elections, which are set for next year.