In the midst of the wranglings and upheaval about the removal of fuel subsidies in Nigeria and Ghana earlier this year, I came across this fascinating Bloomberg article which provides a comparative analysis of the highest & cheapest gas prices by country. 60 countries were utilized in this study and includes developed as well as developing countries. Below is a summary pick of some the countries.
|Norway:Price per gallon of premium gasoline = $10.12, Rank 1/60||Norwegians pay the most of any nationality to fill up their tanks. That’s because instead of subsidizing fuel at the pump, the country uses its oil profits for services such as free college education and savings for infrastructure improvements. Resource-rich Norwegians absorb the high prices with relative ease. The average daily income is $272. The share of a day’s wages needed to buy a gallon of gas is 3.7 percent.|
|Turkey:Price per gallon of premium gasoline = $9.41, Rank 2/60||Turkey is a fast-growing economy and the largest in Eastern Europe, but the high price of gas takes a bite out of family budgets. The average daily income for Turks is $30, and it takes 32 percent of an average day’s wages to buy a gallon of gas.The country has one of the world’s highest gas taxes, which accounts for more than half of the cost to fuel up. About 40 percent of the country’s workers are part of an informal economy that pays no taxes. Only about 4 percent of the total population pays personal income tax.|
Brazil:Price per gallon of premium gasoline = $6.92, Rank 21/60
|Brazil is one of the earth’s natural resource superpowers. Oil is no exception to the country’s riches, with more than 2.3 million barrels pumped there every day. A gallon of gas in Brazil now costs more than the global average, and a modest average income means the price weighs heavily on Brazilians. The average daily income is $34. The share of a day’s wages needed to buy a gallon of gas is 20 percent.|
|Nigeria:Price per gallon of gasoline = $2.32, Rank, Rank 55/60||Nigeria has some of the cheapest gas, yet it’s out of reach for the nation’s poor population. Africa’s biggest oil producer spent all the revenue it received from the oil industry last year — $8 billion — on subsidizing the price of gasoline, according to central bank Governor Lamido Sanusi. The subsidies have drained government coffers and contributed to corruption. A parliamentary probe this year found as much as $7 billion had been paid illegally since 2009 to gasoline importers. Nigeria relies on imports for about 70 percent of its fuel because it lacks the refining capacity to turn its oil into gasoline. The average daily income in Nigeria is $4.53. The share of a day’s wages needed to buy a gallon of gas is 51 percent|
Question: should we continue to subsidize fuel which many studies have shown only benefits the upper and middle classes who have the ability and are willing to pay in developing countries or should we invest our oil profits/monies for services such as free college education and savings for infrastructure development like the Norwegians?
Credit: Bloomberg (Click for full story)