Gasoline prices in Brazil are below the world average, says survey

The price of gasoline in Brazil is below the global average, according to a survey conducted by the Global Petrol Prices database. While the average price of a liter of gasoline is US$1.43 worldwide, in Brazil, it is US$1.12.

According to the survey, the wealthiest countries have higher prices, while the poorest and the oil producers and exporters register considerably lower values.

Pierre Souza, a finance professor at the Getúlio Vargas Foundation, agrees with the survey’s affirmation and attributes the high price in developed countries to the high tax burden. In addition, he considers that the price of fuel varies according to each government’s policy.

“We have particularities in each country. For example, some governments give fuel subsidies or might be large oil producers and decide not to follow international prices. Besides, the big factor that changes the price is taxes. We have seen here in Brazil how this has an influence. The decrease in VAT caused the price to fall around US$0.45 a liter,” says the economist.

In the ranking of 168 countries, from the most expensive gasoline to the cheapest, Brazil ranks 124th. That is, the country approaches the nations with the lowest priced fuel.

The world’s most expensive liter of gasoline is sold in Hong Kong, around US$3, followed by Iceland (US$2.49), Israel (US$2.41), Norway (US$2.38), and Finland (US$2.34).

In the list, 34 countries record a liter of fuel below US$1. Venezuela has the cheapest gasoline sold at US$0.02. Other countries with the lowest prices are Libya (US$0.03) and Iran (US$0.05).

Economist Pierre Souza considers that the perception of fuel prices depends on the purchasing power of the country’s population.

“We see that, for example, in Hong Kong, which has a minimum wage equivalent to US$3,750, you can buy 1,250 liters per month, even though it is the most expensive in the world. But here in Brazil, even though we are in a lower position in the gasoline ranking, you can buy only 196 liters per month with a minimum wage of US$220,” explains the economist.

BRAZIL’S FUEL SCENARIO

In the last balance of the National Petroleum Agency (ANP), the average price of gasoline in Brazil, registered during the week of July 10-16, was US$1.10 per liter. The value dropped US$0.08 compared to the previous bulletin.

Between the end of June and the beginning of July, all 26 states in the country and the Federal District reduced the VAT to 17% or 18%. The law that limits the state tax for essential services, such as fuel, was sanctioned on July 24 by President Jair Bolsonaro (Liberal Party – PL).

This week, Petrobras also announced that the average sale price of gasoline to distributors went from R$4.06 (US$0.74) to R$3.86, a reduction of R$0.20 per liter, a drop of 4.93%. The measure started to be valid on Wednesday, July 20.

According to Petrobras’ Production and Sales Report, released on Thursday, July 21, gasoline sales in the first half of this year were 6.5% higher than in the same period in 2021.

The result was the best for the period in the last four years. The document also pointed out that the gain in participation of gasoline over ethanol in flex-fuel vehicles and the increase in circulation with the decrease in the Covid-19 indexes contributed to the positive numbers.

For economist Gilberto Braga from Ibmec-RJ, the position of the countries in the Global Petrol Prices ranking reflects the capacity of each one in oil production.

“This ranking reflects that the oil-producing countries have lower prices than the countries that are totally dependent on imports. Brazil is in an intermediate position precisely because it is a producing country, so it has a proportionally lower need to buy oil abroad,” says the economist.

“Even so, what draws attention is that for the population, the price of gasoline is high in terms of purchasing power. But if we didn’t have the extraction capacity we have, especially through the pre-salt, we would have a much higher fuel price,” he adds.

With information from CNN