Brazil’s gasoline pump prices per liter close to world average

RIO DE JANEIRO, BRAZIL – The data are from Global Petrol Prices, a tool that monitors fuel and energy prices in 168 countries on a weekly basis, based on official indicators. This report uses an exchange rate of R$5.643 per US$1.00.

It points out that, although the cost of oil on the international market is the same for all, the prices charged by each country are influenced by different taxes and subsidies, as well as by fluctuating currency against the US dollar.

The cheapest prices found by the survey are in two members of the Organization of Petroleum Exporting Countries (OPEC): Venezuela (R$0.221) and Iran (R$0.330). However, both countries practice prices lower than the cartel’s average.

At the other end of the ranking, Hong Kong, in Asia, is the most expensive place to fill up the tank. In the autonomous region of China, a liter of gasoline costs an average of R$14.454.

Although this is the highest price, this is not an isolated phenomenon. A liter of gasoline can exceed R$10 in 25 countries, 19 of which are in Europe. In the Netherlands (R$12.401) and in Norway (R$12.242), prices are over R$12.

BRAZILIAN REALITY

The difference between the international average and what has been charged at the pumps in Brazilian gas stations is in line with the discrepancy pointed out by the Brazilian Association of Fuel Importers (ABICOM).

The entity states that the value charged by Petrobras at refineries is, on average, 13% lower than the international average, which would represent R$0.50.

According to the association, this difference discourages importers from buying fuel abroad, due to the challenge in competing with the prices charged by the state-owned company, which are not in line with the International Parity Policy (PPI) the company uses.

Since gasoline production at Brazilian refineries meets only about 85% of demand, the difference is imported and this gap has led to the product being brought in almost exclusively by Petrobras.

ORDERS

Last Monday, October 19, the state-owned company announced that it will be unable to meet all fuel orders for November, placed by distributors over the usual average for the period.

However, the National Petroleum Agency (ANP) issued a note in which it dismissed any indication of a shortage in the domestic fuel market. “ANP continues to monitor the supply chain and will adopt, if necessary, the appropriate measures to mitigate any discrepancies and reduce risks.”

ABICOM president Sérgio Araújo points out that importers can supply the demand, provided that the state-owned company focuses on marketing only its refineries’ production, thereby allowing importers to seek international suppliers at market prices.

“If this happens and Petrobras announces this decision in advance to its customers, the distributors, I have no doubt that importers will be supplying the necessary volumes to complete demand, thus ensuring that it will be met, with no risk of shortages for December. We have been informed by ANP that there will be no shortage for November,” he said.

HIGH BARREL PRICE

Consumer Price Index coordinator at the Getúlio Vargas Foundation (FGV) André Braz highlights that the international trend is for the crude oil barrel price to rise and agrees that there is a discrepancy in the prices charged by Petrobras. However, he highlights that it works as an instrument to prevent the transfer of any volatility to consumers.

“It is necessary to know beforehand if the increase is the result of a natural movement, or if it is something momentary or speculative. The prices of oil and oil products are on the rise because of reduced supply, but these higher values may encourage some countries to produce more, to profit from this hike, which could reduce these prices somewhat,” the economist said.

In September, official inflation as measured by the IBGE (Brazilian Institute of Geography and Statistics) closed up 1.16%, the highest for the month since 1994, when the Real Plan was implemented. The data was driven by fuel prices, the main villains of the Extended National Consumer Price Index (IPCA).

Petrobras reiterated its earlier position that the extra orders came in above supply capacity, and that there was no fact that justifies the increase in demand from the market’s standpoint.

The company stressed that it has fulfilled its contractual commitments, and emphasized that private agents registered with the ANP can import fuels and absorb the demand. However, in its announcement, the state-owned company did not comment on the imports forecast for December.

GASOLINE PRICES WORLDWIDE, ACCORDING TO GLOBAL PETROL PRICES:

CHEAPEST:
1st) Venezuela (R$0.221)
2nd) Iran (R$0.330)
3rd) Syria (R$1.272)
4th) Angola (R$1.477)
5th) Algeria (R$1,848)
78th) Brazil (R$6.321)

MOST EXPENSIVE:
1st) Hong Kong: (R$14.454)
2nd) Netherlands: (R$12,401)
3rd) Norway: (R$12.242)
4th) Central African Republic: (R$11,692)
5th) Denmark: (R$11,587)
90th) Brazil (R$6,321)

BRICs:
1st) India: (R$7,829)
2nd) South Africa: (R$6,747)
3rd) China: (R$6.746)
4th) Brazil: (R$6,321)
5th) Russia: (R$3,886)

SOUTH AMERICA:
1st) Uruguay: (R$ 8,875)
2nd) Chile: (R$6.626)
3rd) Brazil: (R$6,321)
4th) Paraguay: (R$6,245)
5th) Argentina: (R$5,359)