Chile has the second-most expensive gasoline in South America

RIO DE JANEIRO, BRAZIL – Using the US dollar as a reference, in Uruguay, the average value of gasoline is US$1.60, while in Chile, it reaches US$1.29 per liter. Additionally, the Latin American Center for Economic and Social Policy of Chile’s Pontifical Catholic University (Clapes UC) projects a series of increases for the following weeks.

Along with a global escalation of oil prices, in Chile, fuels have registered prices never seen before and have been averaging over US$1.23 per liter for several weeks now.

The rise is historical and, according to a study by Clapes UC, being only surpassed by Uruguay, Chile is the second country with the highest gasoline prices in South America.

Furthermore, reaching US$1.29 per liter, at continental level, for the week that began on January 17, Chile is the fifth economy with the most expensive gasoline, being only surpassed by Jamaica, Canada, Belize, and Uruguay.

If international prices are compared with the country’s different regions, it is observed that Aysén and Magallanes currently have the highest prices.

According to the Clapes UC report, reported by El Mercurio and carried out by researchers Luis Gonzales and Josefina Henríquez, the international price of oil has shown substantial increases, which are explained by the constant demand despite the Omicron variant of covid-19. “In addition to this, on the supply side, the market sees an inability of OPEC to reach its production targets”, they explain.

Additionally, Clapes UC explains that since Chile is a fuel importing country, the value of the international crude oil barrel and the exchange rate have facilitated the upward escalation of gasoline in the local market.

“The nominal exchange rate has appreciated up to 4% during the current year, explained by a lower uncertainty, but it has not been enough to revert the high subsidy granted by the Government (through the Fuel Price Stabilization Mechanism, Mepco)”, highlights the report.

It is worth mentioning that, according to the newspaper, Chile’s National Energy Commission(Mepco) still has ahead of it a transfer (subsidy) for 93, 97 and diesel fuels of US$0.10, US$0.11, and US$0.05, respectively.

“This means that, under these conditions and keeping everything constant, there would be 13 weeks of increases for 93 gasoline, 14 weeks of increases for 97 gasoline, and seven weeks for diesel, with weekly increases of US$0.01 per liter”, finally projected by the research center.