Tuesday, June 30, 2009 0 comments

Amazingly Chinese gasoline costs more than in America

I find it quite surprising that gasoline in China is slightly more expensive than in America. From a Marketwatch story:

At just over $3 a gallon, Chinese motorists will now pay about one-eighth more for a fill-up than Americans, who were paying an average $2.66 a gallon last week, Reuters reported.


This is actually quite surprising to me. The gross national income per capita at PPP is 48,850 (in the hypothetical international dollar) whereas China is listed at 5,370 in Wikipedia. I'm not sure how the Chinese can afford gasoline at a price similar to America.

Fuel prices have historically been subsidized in China and the government has been reducing subsidies over the years. It's not clear how much is subsidized or what fuels are subsidized. Gasoline prices in China would likely be much higher without the subsidies.

One should keep in mind that there is huge discrepancy in wealth between rural Chinese citizens and urban ones so the incomes would be much higher for the urban dwellers. Fuel efficiency of cars in China are also likely much better than in America. But even then, it's amazing that people spend so much of their income on gasoline in China.

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