Our earlier post compares gas prices in Brazil and around the world. Although Brazil is not the most expensive country in the world when it comes to gas prices, it is still about 80% higher than the US. And that is extremely high considering the country is self sufficient in oil production. The question is: why?
Deciding what to do and where to invest in a country where the cost of gasoline and other fuels are so expensive distorts investment decisions. The outrageous costs cited above have severe (negative) impacts on the decisions made by the productive sector in Brazil. It means that a farmer, for instance, gets his profit margins “squeezed” unfairly just because of these embedded costs posed by the Brazilian government.