Step aside high crime rate and junk status. Fuel prices also want to trend as a label for the country…
As much as we complain in this country about our fuel prices, we not the only ones to feel the pinch of an increase. The Bloomberg global fuel price index, as of April ’17, mentions a global rise of about 1.4%, on average, in the last three months.
However, the price increase is felt quite differently around the world. To put fuel prices in perspective, looking at absolute prices across different countries would be misleading. One has to look at the consumers fuel bill in relation to income per capita.
The index uses three economic measures; fuel price, income spent, and affordability and ranks 61 countries against it. The purpose of it is to understand which countries have the most affordable fuel prices and which ones cry at the pump.
In 2016, South Africa ranked last on the list (according to 2015 stats). The ranking shows that we spent the highest proportion of the average salary on petrol in a year. This year’s ranking moves us to second place with Mexico, who has surpassed South Africa. But even still, SA is still statistically listed as the most expensive country to keep a tank full.
The people of Mexico spent 3.9% of their average annual salary on petrol. Whereas, we, South Africans, spent 3.2% of the average annual salary keeping tanks full.
The country that ranked #1 on the fuel price index was Venezuela. The citizens there spend a mere 0.02% of the average annual salary on petrol.
Rather intrigued by this figure, I went digging into where the bulk of their money goes. I found this graph on Numbeo:
This was South Africa’s expense list:
The cost of living in Venezuela is 20.88% lower compared to South Africa (aggregate data for all cities, rent is not taken into account). Rent in Venezuela is 55.10% lower than in South Africa (average data for all cities).
Venezuela raised the petrol price by 6000pc last year, and it still remained as the cheapest in the world. The price of premium fuel had risen from $0.01 a litre to about $0.60.
As of April 2017, a litre of petrol in Venezuela now costs 3 cents.
Interestingly, this is also what I read:
“Venezuela’s super low fuel price is due the resource being considered a national birthright.
Firstly, the government controls the price of fuel. This should not be surprising, given that the Venezuelan government also controls the prices of bread, beef, milk, flour, and toilet paper.
Secondly, until this week the price of fuel was laughably, outrageously, incomprehensibly low. (The average global price for one litre of petrol is $0.95.) This makes driving a car or running a generator virtually free for Venezuelans, at least in theory. One does not need an economics degree to guess that Venezuela has consequently been suffering devastating fuel shortages (and a thriving black market, both domestically and abroad). In a cruelly ironic twist, in 2009 the then-president Hugo Chávez had to appoint a Minister for Electricity Shortages. And all this, from a country which has the largest oil reserves in the world.
Thirdly, Venezuela has managed to spectacularly mismanage its economy. Of course, this is not exactly news – headlines have been predicting economic Armageddon for Venezuela for months. But the decision to finally raise fuel prices just when consumers all over the world are enjoying a discount is proof that something has gone very badly wrong with Venezuela.
Of course, the two things are connected. Oil makes up 95 per cent of Venezuela’s export earnings, and the collapse in the price has meant the country’s finances have gone from bad to devastating.”
On the affordability front, SA, again, does not fare well. Statistics show that 6.02% of the average daily income of R221 was being used to buy 1 litre of petrol. This makes SA 55th on the global list and 7th worst on the list.
Worse than SA is India, who sits at the bottom of this list. 1 litre of petrol in India takes up an enormous 21.3% of the daily average wage. Venezuela sits at #1 on this list too.
Against world ratings, South Africa sits at 20th in having the cheapest petrol, on a per-litre basis. Which is down four spots from last year when SA was the 16th cheapest.