If you think we've got energy policy problems, just consider China, where as Art Pine points out "Chinese motorists are paying only $2.50 a gallon for gasoline" and prices have "risen 9 percent since early 2007, compared to 80 percent in the United States." That's thanks to planet-destroying subsidies that in a world of rapidly rising oil prices are becoming hard to afford. Similar subsidies are very common in the developing world, and they're very destructive -- the world would be a much better place if the money spent on this was left in people's pockets or directed at something productive.
But cuts in fuel subsidies tend to lead to the sort of political unrest that no government likes to see but that authoritarian governments like China have particular reason to fear lest a protest about reduced subsidies turn into something bigger.
Photo by Flickr user Robennals used under a Creative Commons license