Global Gasoline Affordability Ranking
Crude oil prices are plunging but can drivers around the world really feel any relief? The short answer – it depends. As a result of different policies and market access, prices at the pump vary significantly across countries. On top of that, variation in income levels, including wages and salaries, could be even greater and cannot be ignored.
To answer how much gasoline can an average worker buy in his or her country, we compare gasoline affordability around the world as measured through average gross monthly salaries in 2014 and average local gasoline prices in the first six months of 2015. We compiled a data-set of 65 countries with these indicators. As a proxy for affordability, we use the ability of an average worker to fill his or her car’s tank. We chose this practical way to illustrate affordability because we believe it is easier for one to imagine cars lined in a parking lot than raw numbers showing hundreds or thousands of liters of gasoline. After consulting car dealers, we established that 50 liters is a fairly good approximation of the average fuel tank’s capacity of contemporary passenger cars. The result of our analysis shows how many such tanks can be filled with the average monthly salary.
It is very important to note that calculations are based on gross wages, i.e. before taxes and social security contributions are deducted. We use gross figures because they are available for most of the countries we examined. In reality, disposable income and hence the amount of gasoline that can be bought are lower than reported in our ranking.
The top and the bottom
According to our analysis, the average worker can afford the greatest amount of gasoline in Qatar – around 213 full 50-liter fuel tanks with an average gross wage of USD 10,670 per month. On top of high income, the country’s government, like others in the Persian Gulf, subsidizes heavily retail prices. In the first half of 2015, Qatari residents paid only USD 0.27 per liter of gasoline. This price is among the lowest in the world making gasoline even more affordable and its use – more wasteful. In the chart, second to Qatar stands the United States (135.5 tanks), followed by Australia (116 tanks), Kuwait (101 tanks) and Luxembourg (100 tanks). At the bottom of the ranking is Indonesia with only 3.3 full tanks per month that its residents can pay for. Following Indonesia the chart ranks Tajikistan (3.4 tanks), Pakistan (3.5 tanks), the Philippines (4.3 tanks) and Vietnam (4.6 tanks).
To illustrate the wide gap in purchasing power, it is fair to say that, with the average monthly earnings, workers in Qatar can afford around 65 times more gasoline compared to their peers in Indonesia. Overall, the average worker in the 65 countries from our data-set can expect to buy up to 1881 liters of gasoline per month. That is 37.6 fuel tanks of 50 liters.
How we built the ranking – notes on methodology and sources
We collected the data and did the calculations following several steps. First, we took average annual wages in 2014 for countries that are members of the Organisation for Economic Cooperation and Development (OECD) and divided the figures by 12 (the number of months in a year). OECD wages are in 2014 constant prices at 2014 USD exchange rates and were derived from the OECD statistics website. Second, we added data on gross average monthly wages in 2014 in USD (current exchange rates) from the statistics site of the UN Economic Commission for Europe (UNECE). Thus we supplemented data on European countries that are not part of OECD. We prefer UNECE to Eurostat, the EU statistical agency, because the former covers more countries, i.e. both EU and non-EU members. Third, data on a number of other countries was added using public information from national statistical offices and international bodies (these countries are marked with *). Where applicable, wages in national currencies were converted to US dollars thanks to historical exchange rates provided by the OANDA Corporation. Data on Asian countries marked with ** were taken from the ASEAN organization; figures derived from it are 2014 monthly earnings in US dollars.
Fourth, using weekly gasoline prices from GlobalPetrolPrices.com, we calculated the average rates from January to June 2015; we then converted them to US Dollars, again using historical exchange rates by the OANDA Corporation. The prices refer to gasoline with 95 octane number (RON 95). Fifth, we divided the monthly gross wages by the gasoline prices in USD. Sixth, the resulting quantities of gasoline were divided by 50 liters, the estimated capacity of a fuel tank in most modern automobiles. Finally, we got the number of such tanks that can be filled with the average gross wages.