MercoPress. South Atlantic News Agency

Chile fuels are among the most expensive in world

Gasoline prices in Chile are among the highest in the world ? greater than in almost all European countries and twice the price in the United States. The most commonly used fuel in Chile, 95 Octane, topped $660 pesos per liter on Thursday (US$4.58 per gallon).

Utilizing a "purchasing power parity" formula that helps compare currencies in different countries, the price of Chile's fuel increased to 1,119 pesos per liter (US$7.77 per gallon). The cost of fuel in most European countries is the equivalent of $800 pesos per liter and costs $440 pesos per liter in the Unites States.

The trend of high fuel prices is common in Latin America, except for Venezuela and Ecuador, two petroleum producing countries. President Michelle Bachelet on Wednesday asked citizens to remain calm after a historic price increase of $37 pesos per liter for fuel and said her government is taking measures to mitigate the increase. She added: "The increase in price is an international trend, a factor the Chilean government can not control."

Fuel specific taxes and the local IVA (Value Added Tax) contribute to more than 40 percent of the cost of a liter of fuel in Chile.

Senators from various political parties have proposed a law to stabilize prices by offsetting fuel increases with a drop in fuel taxes: each time the price of fuel is above $600 pesos per liter, taxes would decrease accordingly. Should the price per liter drop, the tax would rise. This proposal was sent to the House of Deputies Thursday to be analyzed.