Higher fuel prices will be a drain on profits for some Asian businesses, but the impact is expected to be short term as the price of crude continues to fall. 'This is not a huge concern in the long term,' said Arjuna Mahendran, head of Southeast Asian economic research for SG Securities (Singapore). Mr Mahendran said in the past three days, India increased the price of petrol and/or other fuels by 20 per cent, with Malaysia raising prices by 9.1 per cent. Including increases from the Philippines and Indonesia, he said the average rise for products was 10 per cent to 15 per cent in Asia. Such rises are in response to the price surge in crude oil this year, initially on concerns of under-supply before a northern winter. United States crude rose to a 10-year high of US$37.80 on September 20, two days before President Bill Clinton announced the release of oil from national reserves. Still, many economists are confident the recent fall in crude prices will continue. 'What's happened is that oil prices have shot up to over US$35 a barrel and they've now fallen back to US$31 and we're seeing the laggard effect,' said James Brown, an oil and gas analyst at Merrill Lynch. 'Petroleum prices do tend to lag behind crude prices . . . oil prices have now come off and over time, that should result in lower petroleum product prices.' Mr Brown said he expects crude to fall back to about US$25 a barrel by the first quarter of next year. 'We'd expect to see quite a lot of relief in petroleum prices across the world. I do believe [it's short-term] . . . I'm talking several months.' For companies such as Indonesia's Astra International - which distributes vehicles and operates in the heavy-equipment and infrastructure sector - or manufacturing companies such as Malaysia's Proton group, the immediate costs are high. Shares in Astra fell 75 rupiah to 2,315 yesterday (its closing high was 4,075 on January 11), with Proton off four cents to a closing low for the year of M$3.58. Economists said Indonesia, the only net oil importer in the Organisation of Petroleum Exporting Countries, and Malaysia, had both raised fuel prices to reduce the subsidies they pay. Affected companies will have to take it on board as demand is still weak with the economies of both countries still shaky following the Asian crisis. 'I reckon in the case of Indonesia, it's primarily a revenue-boosting measure [by the governments],' said Pieter van der Schaft, economic research associate director for Barclays Capital. 'If the governments do not raise energy prices, it's known that their liabilities go up and the economy doesn't adjust at all.' Eddie Wong of ABN Amro said Malaysia should not even be subsidising fuel, a practice to which it had been loyal for more than 15 years until last weekend. 'For the Philippines and India, they need to increase the fuel price because they have a budget deficit problem, so they're not in a good financial position to finance these subsidies,' he said.