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 Oil prices have dropped nearly 70 percent in the past 20 months,
driven down by a glut in supply. All countries have access to the
same oil prices on international markets, but retail gasoline prices
vary wildly, largely because of the taxes and subsidies imposed on
them.
That has meant the impact of diving oil prices has been uneven
around the world.
In the United States, for example, drivers have enjoyed the fall as
average gasoline prices tumbled to $1.64 a gallon ($0.43 a liter)
last month from $3.37 a gallon ($0.89 a liter) two years ago. That
has spurred a road renaissance of sorts as Americans hit the
highways in greater numbers.
"It's great. It used to pain me to fill up my car, but now it's no
big deal," said Patsy Gehring, a 59-year old who lives in
Philadelphia. She says she notices the low pump prices every time
she fills up her 2014 Honda Civic and is considering driving instead
of flying on an upcoming trip to Florida.
"I'm probably going to end up driving. I'd prefer to fly, but gas
prices are so cheap it just makes sense," she said.
The decline in prices at the pump has been more muted in countries
like Indonesia, China and India, which have tried to reduce
subsidies and absorb some of the gains from lower oil prices as
taxes or levies, Barclays said in a research report.
Overall, retail fuel prices in Asia - which is home to three of the
world's four largest energy importers - have fallen only about 35
percent despite the almost 70 percent decline in oil prices since
July 2014, Barclays said.
"NO CHOICE"
In China, the wholesale gasoline price ceiling - which is set by the
country's central planning commission - has fallen 29 percent since
February 2014. But in January regulators set a floor on price cuts,
saying they would no longer adjust prices down when oil prices are
below $40 a barrel. One benchmark oil price, Brent crude, was
trading at around $36 a barrel this week.
Meanwhile, the Chinese government has also raised the consumption
tax on fuel three times six since the slide in oil prices began. In
Beijing, motorists appeared resigned to the limited benefit.
"When you look at oil prices, you can see the price at the pump
should be a lot lower," said a 35-year-old man driving a black Audi
A6, who gave his surname as Gao.
In Hong Kong - which has the world's most expensive gasoline at
$6.69 per gallon ($1.76 per liter) according to
www.globalpetrolprices.com - the slow downward march in prices has
not impressed car owner Simon Lam. "It's been at this price range
for so long and we have no choice but to accept that," he said.
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A different story is being played out in two major oil producing
countries - Saudi Arabia and Venezuela - where prices at the pump
have actually risen due to cuts in subsidies, imposed to compensate
for the economic hit from the oil price crash.
Venezuela in February increased pump rates for the first time in
nearly 20 years. Its 95 octane gasoline rose more than 6,000 percent
from 0.097 bolivars to 6 bolivars per liter. (From 0.36 bolivars to
22.7 bolivars per gallon.) While that is $0.60 at the strongest
official exchange rate it is far less at the weakest official rate
and just $0.006 on the black market, making it the cheapest fuel in
the world at that rate.
The price is so low – especially in the face of raging inflation –
that many Venezuelans support raising fuel rates even more.
"Gasoline is too cheap here. A liter of water is still more
expensive than a liter of fuel. I have family abroad in Ecuador, and
there it's very expensive, here it's nothing! They should have
increased it a bit more," said taxi driver Raul Ramirez as he filled
up his car at a Caracas gas station recently.
Similarly, Saudi Arabia - with its finances also hit hard by the oil
slump - in December raised the price of 95 octane gasoline to 0.90
riyal ($0.24) per liter from 0.60 riyal. (From 2.27 to 3.40 riyal
per gallon)
That still keeps Saudi Arabia among the countries with the cheapest
gasoline prices in the world, so motorists are not complaining too
much.
"It is still cheap, still reasonable - people can afford it," said a
40-year-old as he filled up at a gas station in Khobar near the
state oil company's headquarters.
"You don’t usually tip the guy at the pump but in Saudi Arabia you
do because petrol is so cheap."
(Additional reporting by Adam Rose in Beijing, Alexandra Ulmer in
Caracas and Rain Liang in Hong Kong; Writing by Deepa Babington;
Editing by Frances Kerry)
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