Madhumitha Jaganmohan
Research expert covering climate and environmental sustainability
Get in touch with us nowRising oil prices
Although severe oscillations in oil prices are no novelty, the drop caused by the COVID-19 pandemic reached unprecedented levels. Venezuela, one of the founding members of OPEC, saw the price of its reference Merey blend reach seven U.S. dollars per barrel in April 2020. However, in February 2024, this price was around 67 U.S. dollars per barrel, a year-on-year growth of nearly 68 percent. Crude oil prices above 100 U.S. dollars per barrel were recorded in Mexico, Ecuador, and Brazil in 2022. As of June 2023, the residents of Uruguay had to pay the highest price for gasoline in that region. The high oil prices and the fruitful trade agreements between Latin America’s countries and the United States gave a push to the national economies.Gasoline prices and the Latin American consumer
As a product of crude oil refining, gasoline prices are largely dependent on the price of this fossil fuel. Not surprisingly, in the first half of 2022, gasoline prices surged in most Latin American countries, a consequence of the rising oil demand. For instance, between January and June 2022, gasoline prices in Panama increased by 65 percent. On the other hand, in countries where the fuel prices are regulated by the government, such as Bolivia, Ecuador, and Colombia, the gasoline purchasing power was among the highest in Latin America and the Caribbean. In sharp contrast are Peru, Nicaragua, and Cuba, the poorest country of the ranking, where an average salary can purchase less than 30 liters of gasoline.Looking towards a more sustainable energy future
The global energy crisis has once again put on display the challenges of relying on fossil fuels as a main energy source. Renewable energy has become considerably more competitive in the past decade. The price of onshore wind power in Latin America dropped by approximately 60 percent since 2010. This trend in clean energy prices, combined with governments taking a strong stance on energy policy, such as Chile since 2022 and Brazil since 2023, might play a key role in the Latin American (and global) energy future.This period of volatility in the energy sector has stimulated discussions around energy policies, emphasizing the need for sustainable solutions.
