Mauricio Medinaceli Monrroy
Private Consultant
Oil - Natural Gas - Energy

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Blog.035

Prices of Liquefied Petroleum Gas (LPG) in the World

"Garrafa" in Bolivia, "cilindro" in Colombia, "bombona" in Venezuela, "botella" in Spain, "botijão" in Brazil , گاز با لون (read "baloonegas") in Afghanistan... All these names refer to the same product, the popular "LPG" usually used in homes for cooking and, because is a product of high social impact, generates the same problem in most countries: high prices affects poor households. Because, dear friends, there's a lot of people using this source of energy for cook, therefore, no wonder why lot  of  presidents share the same nightmare: resign to the presidency because an increase in the price of this product.

With this introduction I want to share with you the results of a study OLADE and worked with the American Association of Liquefied Petroleum Gas (AIGLP) that was recently published "Policy fuel subsidies in Latin America: The Price of LPG" if you want you can download the document at the following link: http://bit.ly/Wbi4C7. I should point out and recognize that the issue is impeccable, for attachment shows the photographic material used. In this sense, the text can be subject to considerable debate, however, the format is ... "de luxe".

 

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As I did with the price of gasoline (see the previous post on the following link http://bit.ly/YFcoYo) now I want to share with you a chart where I show the LPG price, in dollars per kilogram, for certain countries in the world, in December 2012. There is not much variation from ordering of countries compared with the case of gasoline, however, worth noting two of them: 1) Argentina shares, together with Bolivia, Ecuador and Venezuela, at the bottom, it responds to: i ) a price stabilization policy adopted by the government and Producers and ii) the significant depreciation of the Argentine peso against the U.S. dollar ... Remember that many years ago (more than ten) the exchange rate was 1-1? Well, now is 4.9 pesos per dollar. Despite meet outside my country, I believe that in these year-end holidays, the delicious Argentine products to the delight of many homes Bolivianos, especially the pudding that I like both. 2) In the case of USA want to comment that the price is of Mont Belvieu present, an international reference for the supply of LPG.

 

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A common criticism of the graph above is that it does not reflect the "cost of living" in each country. We (as I mentioned in previous posts) is not the same as having $ 100 in Bolivia or Ecuador to them in Brazil or Spain, with high probability in the first two countries U.S. $ 100 representing 50% of the monthly salary of a person, while in the following two countries, these U.S. $ 100 representing the salary of a person in a day or two. Here, I present the following graph, which relate the cost of a bottle / cylinder / cylinder / bottle / balunigas 10 kg of LPG with monthly per capita GDP of each country. What? Come up with an example, a person (average income) in Paraguay intended almost 5% of their monthly salary (yes. .. monthly) for the purchase of LPG, while a person in Venezuela spends only 0.1% of their salary to acquire this well. I note that the data for Afghanistan and Nicaragua are 28% and 9%, respectively, Unbelievable no? Now perhaps it clear why higher energy prices can be a complete nightmare. What you would like to spend 28% of their monthly salary for the purchase of an LPG cylinder?

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Well, reviewing the experience in many of these countries, the recurring theme is the price of LPG subsidy, to be a good that is consumed by "the people", not much imagination is needed to anticipate the kind of social problems that entails any elevation at this price. Some discussion on this topic can be found in the document to which I referred initially, now I just want to share this link http://bit.ly/ToJbMJ, it will find how El Salvador changed the price subsidy by one of the direct income families, really is a noteworthy example. I also take this paragraph to share with you one of the most perverse of price subsidies, as they say in many countries, "to show just a button." The attached photograph I took some time in subsidized country in South America, it may see a lawn mower ... yes, turf, adapted to the use of LPG. They say a picture is worth a thousand words, in this case I think it is true, in the presence of subsidized prices people use this product to enhance the garden, pool heating, drying, etc.. So, Dear friends @ their taxes (which at the end of the day, are a source of funding for any subsidies) are used in fun (to use a term non-negative) private enterprises.

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Today in Kabul had an average temperature of 1 degree and it reminded me what an Afghan friend told me the other day, families often spend in Afghanistan to 3 kilos a day of LPG (the equivalent of 10% of the monthly income of a person) to heat their homes. Through this event, I thought about that when providing energy (efficiently) families, it can greatly improve your quality of life.

And to conclude and end two days of this 2012, I want to thank the time you spend reading this blog, if for some reason you want to be notified about your update, email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ... I will be happy.

Big hug! the 2013 is great and we found one of our passions discussed: energy.

Mauricio Medinaceli

Kabul, December 29, 2012

 

 

 

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