Market News Not only America! Soaring gasoline prices cost Brazilians 33% of their wages
Not only America! Soaring gasoline prices cost Brazilians 33% of their wages
Soaring gasoline prices, coupled with rising international oil prices, are taking a financial hit on households around the world, who have to spend more and more of their disposable income on energy bills.
2022-05-31
9628
Soaring gasoline prices, coupled with rising international oil prices, are taking a financial hit on households around the world, who have to spend more and more of their disposable income on energy bills.
U.S. gasoline prices have hit record highs frequently this year, overwhelming motorists. The latest data from the American Automobile Association (AAA) showed that gasoline prices in the United States hit a new high on Monday, with the average retail price reaching $4.619 a gallon. That level is up from $4.178 a gallon a month ago and about 52% higher than a year ago.
And at nine gas stations in California, the price of regular gasoline is already higher than the federal minimum wage. Because of excise taxes, sales taxes, and higher refining standards, California has the highest gasoline prices in the nation.
Several gas stations in downtown Los Angeles and San Francisco already exceed the federal minimum wage ($7.25), according to Patrick De Haan, director of petroleum analysis for travel and navigation app GasBuddy. Gas prices at a Los Angeles gas station are now as high as $7.83.
Ed Yardeni, president of Yardeni Research, previously said record-high fuel costs are eating into workers' wages. He estimates that the typical American household will spend more than $4,800 on gasoline this year, up $2,000 from last year.
For some other countries in the world, the economic burden of soaring gasoline prices is even more severe.
Brazilians spend 33 percent of their monthly minimum wage to fill a 14.5-gallon gas tank, according to data compiled by the media. That figure is 24 percent in Mexico, 18 percent in Argentina, 17 percent in Chile and 13 percent in Colombia.
According to relevant data, the current gasoline price in Brazil is around 27.5 rials per gallon, while the minimum wage in the country in 2022 is 1,212 reais per month.
High fuel costs are rapidly eating into Brazilian wages, leading to a drop in the approval ratings of the country's president, Jair Bolsonaro. To salvage popular support, Brazil's president backed legislation to lower taxes and fired three heads of state oil company Petroleo Brasileiro SA over high fuel costs.
By contrast, the situation in the U.S. is not so bad, where it costs Americans just 6% of their monthly minimum wage to fill up a 14.5-gallon gas tank, even though their purchasing power has fallen sharply over the past two years. In April 2020, the average American earned more than 17 gallons of regular gasoline at a gas station for an hour of work, compared to just 7 gallons now.
In Europe, gas and electricity bills are expected to jump from 3.5% to 4.5% of household disposable income. That figure doesn't even include gasoline prices. Europe is struggling to wean itself off Russia's fossil fuels, but it's not going well, with energy shortages and soaring prices increasingly taking a toll on European households.
For many working-class people around the world, the cost of living is hitting a painful threshold, even causing social instability in some countries. The world may be entering an era of turmoil as soaring energy and food prices continue to eat into people's disposable income.
Article source: Financial Associated Press, original title: Not only the United States! Soaring gasoline prices are crushing households around the world, with Brazilians paying 33% of their wages on a tank of fuel.
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