Fuel price increases have been significant recently, and this trend continues with the current price at USD 118.8 per barrel, reflecting a 4.7% increase compared to last month. This has been reflected in constant increases in gasoline prices nationwide, with the latest increase this week amounting to CLP 12.3; in certain areas of the Metropolitan Region, 93-octane gasoline now exceeds CLP 1,140.

What factors influence fuel price increases in our country?

There are several key factors to highlight: the cost of oil production (coupled with high demand), transportation to Chile (especially given the rise in shipping costs following the pandemic), the value of the dollar (which exceeded CLP 900 this Friday), and the Fuel Price Stabilization Mechanism (Mepco). 

Below is a graph showing the purchasing power of the USD per gallon in different countries:

It is worth noting the various alternatives that have been developed over time to replace traditional fuel, such as electric vehicles. There is even a Chilean startup called EcoFuels that has developed fuel made from contaminated or used plastics. However, this fuel is not yet suitable for vehicles. 

Given this trend, it’s worth asking whether the car is the best mode of transportation today. It’s no coincidence that we’re seeing more and more people riding bicycles or electric scooters to the office or to pick up their children from school. 

Pablo Garcés

AGF Team