Bolsonaro in London: Brazilians have to work 6 times harder than Brits for 1 liter of gasoline | Economy

Bolsonaro in London: Brazilians have to work 6 times harder than Brits for 1 liter of gasoline | Economy
Bolsonaro in London: Brazilians have to work 6 times harder than Brits for 1 liter of gasoline | Economy
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In front of a gas station in the British capital, which sold a liter of gasoline for 1.61 pounds (equivalent to about R$9.70), Bolsonaro said that the value was “practically twice the average of many states in Brazil.” “.

“I’m here in London, England. The price of gasoline: 1.61 pounds. That’s approximately R$9.70 a liter. That is, practically double the average of many Brazilian states,” he said.

Nonetheless, the president’s speech does not take into account the differences in population income between the two countries — and therefore how long a citizen would have to work to fill up his car.

In the UK, the minimum wage is £9.50 an hour. Considering the price of gasoline at 1.61 pounds per litre, as indicated by the sign of the station in front of which Bolsonaro made the video, a British citizen receiving minimum wage would have to work the equivalent of 10 minutes to buy a liter of gasoline.

In Brazil, the minimum wage is R$1,212 per month, or R$5.51 per hour. Considering the average price of gasoline at R$4.97 per litre, as the latest survey by the National Agency for Petroleum, Biofuels and Natural Gas (ANP) points out, an average Brazilian citizen would have to work the equivalent of 54 minutes, that is, almost six times more than the British to pay for the same liter of fuel.

In terms of per capita income — GDP (Gross Domestic Product, or the sum of goods and services produced by a country) divided by its population — gasoline is also cheaper for the British than for the Brazilian.

Last year, the UK’s annual per capita income was $49,675, while Brazil’s was $16,506, according to the World Bank. Therefore, considering the corresponding values ​​mentioned above in dollars, a liter of gasoline would cost 0.004% of the average British person’s income, while 0.006% of the average Brazilian’s income.

“Bolsonaro did the mere conversion of nominal exchange”, explains to BBC News Brasil Fabio Terra, professor of Economics at the Federal University of ABC (UFABC). “It’s not just price that matters, income matters a lot, because it is what allows you to buy some ‘price’, that is, some product”, he adds.

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An economist heard by BBC News Brasil recalled that every comparison “has its limitations” and added that Bolsonaro’s speech ignores “local realities not only in terms of income, but also in terms of legislation, of Brazil being an oil producing country.” .

Terra, from UFABC, adds that, despite this, “we also import a reasonable part of what we consume here”.

“In the case of diesel, imports reach 30%. We also import many refined petroleum products. And we do this import with a weak currency when compared to the dollar, the currency in which oil is quoted, while the United Kingdom does it with a strong currency” , points out.

On social media, users also pointed out Bolsonaro’s mathematical contradiction.

According to a ranking prepared by the monitoring platform Global Petrol Prices, Brazil has the 34th cheapest gasoline among 168 countries and territories ($0.99 per liter). And Brazilians also pay less for this fuel than the world average ($1.33 per liter).

However, this list has a strong influence on the exchange rate, as values ​​are converted from local currency to the dollar.

In this sense, as the pound sterling is more valued against the US dollar than the Brazilian real, the United Kingdom appears in this ranking as having “more expensive” gasoline than Brazil.

According to Global Petrol Prices, the country where gasoline is cheapest is Venezuela. There, a liter of gasoline costs the equivalent of US$ 0.02. But Terra, from UFABC, points out: “In the case of Venezuela, there are two things: on the one hand, the abundance of oil; on the other, the pricing policy they use to translate producer prices to consumer prices.”

The Venezuelan government keeps gasoline prices under tight control and subsidizes much of the cost, keeping prices low for the final consumer.

In fact, however, the average value of gasoline in Brazil has been falling. And this is due to a set of measures taken by the government.

Bolsonaro zeroed the PIS and Cofins rates, two federal taxes, on diesel and cooking gas by December 2022, and announced a broad package of BRL 53 billion to try to reduce fuel prices.

This is one of the biggest “troubles in the president’s shoe” in his quest for reelection — even truck drivers, who supported him on his way to the Planalto in 2018, were harshly critical of Petrobras’ pricing policy.

Last week, for the first time since July 2020, the average price of gasoline in Brazil dropped to less than R$5, according to the ANP, in values ​​adjusted by the IPCA, which measures official inflation.

It was a drop of 32.7%, or R$2.42, compared to the peak of R$7.39 per liter recorded at the end of June, before the state and federal tax cuts approved by the National Congress.

The article is in Portuguese

Tags: Bolsonaro London Brazilians work times harder Brits liter gasoline Economy

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