A price is expensive or cheap in relation to the purchasing power you have.
If the cost of gasoline in Switzerland seems at first glance “very expensive”, it really is not, when compared to the level of wealth in the country.
Hong Kong has the highest price in the world ($2.98 a liter, $11.28 a gallon), but it is not the most expensive for its population’s standard of living, according to the “gasoline affordability ranking.” ) produced by Global Petrol Prices, an energy data collection and analysis project.
Hong Kong has the highest price in the world.
“There are oil-exporting countries, like Qatar and Kuwait, that keep the price of fuel very low by subsidizing it, but there are also advanced economies, like the United States and Australia, where fuel is more expensive but incomes are high,” he explains. Neven Valev, director of Global Petrol Prices and the Global Economy Project.
“At the other end of the scale are mainly poor countries. Gasoline there is not particularly expensive but the income level is very low,” he adds.
This is how Qatar, Kuwait, Luxembourg, the United States and Australia are the countries with the most affordable prices for the pockets of their inhabitants.
On the other hand, Mozambique, Madagascar, Malawi, Sierra Leone and Rwanda have the most expensive prices in relation to the income level of each nation.
The energy crisis
When the world is in the midst of an energy crisis, the price of gasoline has become a central concern in most countries that must buy fuels in international markets to supply their local demand.
The frantic increase in the price of fuels such as oil, gasoline, diesel and gas has shaken the global economy, in the midst of an inflationary wave that is hitting the household budget hard and causing disruptions in the cost of credit ( by the rise in interest rates) and economic growth.
What has happened, Valev tells, is that “the effect of the war in Ukraine was added to the general trend of rising energy prices as the world economy recovered from the pandemic.”
Although the fluctuations in the price of oil in international markets affect the price of gasoline that consumers pay, the situation is very different in each country, depending on whether it is an exporter or importer of crude oil, if it has the capacity to refine it, and other factors, such as how much is the level of subsidies applied by governments.
Without considering affordability, another way to rank countries is directly by the cost of a liter of gasoline, regardless of a nation’s income level.
From this perspective, the lowest prices are in Venezuela, Libya, Iran, Algeria and Kuwait.
On the other side of the scale, with the highest prices in the market, are Hong Kong, Iceland, Zimbabwe, Norway and the Central African Republic.
Gasoline in Latin America
The affordability ranking compares gasoline prices in 150 countries, although not all Latin Americans make the list.
In the following list we show you the countries of the region ordered from the nation where gasoline is more affordable for its population, to the one where the price is more expensive for its inhabitants.
This list was made considering the cost of filling a 40-liter gas tank.
According to this calculation, the countries with the least expensive gasoline for their population would be Panama, Chile and Colombia, while the countries with the highest cost are Nicaragua, Honduras and El Salvador.
It is convenient to clarify that the index uses the data of Gross Domestic Product (GDP) per capita as a measure to standardize the income per person, which means that the calculation is not based on an analysis of the average monthly income that people receive. or homes.
What can happen in the future?
At the beginning of the year, the world average price of gasoline was US$1.23 per liter.
As the months passed, it rose, until at the end of June it reached its highest point, when it reached US$1.50 per liter.
Currently, it is following a downward curve that places it at US$1.31, that is, prices are approaching the pre-war level.
Something similar is happening with oil, in that “most forecasts point to a slow and gradual decline in oil prices to pre-war levels,” he argues.
“The key driver of that trend is the slowdown in economic activity around the world,” says Valev.