Monday, April 11, 2011

REALITY CHECK


Fuel Prices - Rio Branco Brazil - 10 April 2011
Fuel prices per liter - Rio Branco AC Brazil - 10 April 2011

As the the wars in the Middle East cause a spike in global oil prices, gas is hovering around $4 per gallon in my old Oregon homeland. The news reports that this will slow economic "recovery" in the States. It's interesting to see how it looks from Rio Branco, the capital city of Acre state, Brazil.

Brazil has a global reputation for being self-sufficient in providing transportation fuel. This is achieved in part by regulated prices set by the national oil company Petrobras plus regional variations due to transport costs. Yesterday, the price for gasoline in Rio Branco was approximately $7.60 per gallon in a state where the per capital income (including the rural poor) is less than 15% of what it is in Oregon. In sum, it is very expensive to run a car in Acre -- about twice as much as in much richer Oregon.

Inexpensive fuel is essential to a higher standard-of-living in Oregon. To maintain the habitual levels of US consumption, wars have to be fought in places like the Middle East. Brazil doesn't have it so good materialistically and it thinks that it's wrong to intervene with bombs and missiles in faraway places.

Economic development is not inexpensive. It is always paid for somehow and somewhere.

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