Yesterday, President Twobreakfasts signed an executive order to lower the prices of 90 octane and 84 octane fuels by 9% and diesel by 4%. That means the benchmark 84 octane sells for a maximum price of S/10.50 per US gallon in Lima (transport costs can raise the price for some of the harder to get at corners of Peru….you’ve seen the map with the bigass mountain range running through the country, haven’t you?).
So now that Peru has cheaper fuel, time to rejoice, no? Hmmmmmm…let’s put it in a bit of context. Here’s a chart that shows the current prices for the same US gallon of fuel in the USA and Peru in US dollars (I got the US national average from gasbuddy dot com tonight, though I do understand that for example Missouri has $1.80/g fuel and California has $2.40/g fuel right now).
Big difference, no? Well, the 50% difference in average pump prices between the two nations isn’t even half the story. According to the CIA World Handbook, GDP per capita in the USA was U$45,800 for 2007 (PPP) and GDP per capita in Peru stood at U$7,600 (also PPP). So this next chart shows just how much fuel the average per capita GDP can buy in its own country.
Yep, that’s nine and a half times as much in the States as it is in Peru. Thought of in basic terms, it hurts the pocket nine times more in Peru to fill your car up than it does in the States. So no more whining up there, please……..