Asia-Pacific governments have been adopting several efforts to mitigate the near-term credit effects of the Middle East energy shock, although these measures transfer the pressure onto public finances, Fitch Ratings said in a recent release.

Governments have been countering energy supply pressure through subsidies, price caps, administrative curbs, and energy import diversification, Fitch said.

Vietnam has stretched its fuel tax suspension until Jun and eliminated import tariffs until April.

Malaysia raised its monthly petrol and diesel subsidy bill, while Singapore increased its corporate tax rebate and carried out reliefs.

In India, the government pulled back on full customs duties on 40 petrochemical products while reducing special excise duties on petrol and diesel.

These efforts should lessen short-term inflation and social risks, offering a buffer against sudden demand weakness and operating pressure for corporates, the rating agency said.

On the other hand, the measures also create strains on sovereign balance sheets, state-tied entities, and regulated energy frameworks, with diverging credit impacts across sovereigns and energy and regulated utility entities, Fitch said.

The rating agency considers price controls as causing market signal disruptions and can add more credit stress.

Pakistan, the Philippines, and Thailand have permitted domestic fuel price movements while Indonesia and India have maintained pump prices, Fitch said.

China increased prices to levels below cost increases, while South Korea will not have fuel price cap changes for the next few weeks.

Thailand requires price reductions, while the Philippines paused its electricity spot market to control increases in electricity bills.

Fitch considers the actions as anchoring near-term affordability but disruptive to the profitability of energy entities under delayed compensation.

State-linked companies' growing role in supporting energy needs amid the shock could dampen their standalone credit profiles, Fitch said.