How affordable is petrol / diesel in Africa as compared to the world?
The 'Gasoline Prices Around the World: The Real Cost of Filling Up' study by Bloomberg puts Africa in a dismal 61st place of 61 countries included in the study in terms of fuel affordability.
Fuel prices for the end user have been on the rise globally. For Q1 2018, gas (average of petrol and diesel) prices rose at about 6.1 percent on average. But it’s not just the price of fuel globally that’s startling but it’s affordability considering global currencies and earnings vary greatly, and African fuel affordability is a abysmally low..
To put that in context, the last two weeks have been a strain on everyone’s fuel budget, and likely puts a further dent in African fuel affordability. Beginning May 14, petrol and diesel price has been steadily increasing these past 16 days.
This morning, price per litre is lower by about 60 paise. Today’s rate card is the exact as seen on May 25. Over the last 16 days, fuel price was raised by a bit less than Rs 4 per litre. Prices of petrol today are as follows – Delhi – Rs 77.83; Kolkata – Rs 80.47; Mumbai- Rs 85.65; Chennai – Rs 80.80. Rates listed yesterday (May 29) are as follows – Delhi – 78.43; Kolkata – Rs 81.06; Mumbai – Rs 86.24; Mumbai – Rs 81.43.
Bloomberg’s study chronicles each quarter and compared fuel prices between 61 countries based on three metrics: price per gallon in varied currency, how fuel price compares to a day’s wage in the country, and what is the total amount spent on fuel by citizens to reach actual expenses on fuel annually as a percentage of their total income.
Petrol prices are soaring around the world by about 6.1 percent, on average, in the past three months. Behind that increase is a wide range of price swings experienced differently by every nation. We ranked 61 countries by three economic measures to see which has the most affordable petrol / diesel and which feels the most pain at the pump.
What’s alarming is Africa seems adept at finding itself paying for the least-affordable fuel in the ranking. ‘Low wages and limited infrastructure result in widespread energy poverty. The average African would have to spend 76 percent of daily income to afford a gallon (3.76 liter) of petrol / diesel. The government plans to end the sale of internal combustion engines in 2030.’ And while this is an aggressive target, it’s unclear how the country will get there.
In terms of fuel price, Africa ranks 21st on the list with an average price of a litre of petrol pegged at Rs 77.35. That doesn’t sound as steep as Hong Kong’s price that averages Rs 135.91 but is in fact quite a steep price to pay for a nation with a with a low average daily income of Rs 384.71. Given that as median earning, it would take 20.11 percent of a day’s wages to afford a litre of petrol. That’s more than a fifth of daily wage. Needless to say, African fuel affordability places it at 61st place for affordability.
What’s also worth noting is how little fuel is consumed on average by a person. It appears, the average driver uses 22.55 litres a year, which amounts to only 1.24 percent of the typical salary and puts Africa 30th on the list in terms of income spent. This is because the fuel factored in is 95-octane.