Even with recent deflation, Brazilian energy prices are among the world’s highest

Brazil’s July inflation reading flagged an overall 0.68-percent deflation, mainly the result of lower energy prices — a direct consequence of the government’s moves to cap state-level taxes on fuels and push utility bills down. 

For energy as a whole, 12-month inflation is now down to 3.3 percent. But Brazil’s energy costs remain among the world’s highest when adjusted for per capita income — only Colombia pays proportionately more than Brazilians for electricity and gas. 

For instance, while Brazilian families have a monthly budget that is ten times smaller than their American or Japanese counterparts, they pay twice as much for energy. The data comes from the International Energy Agency for 2021 and was compiled by Abrace, an association of Brazilian energy consumers.

“Brazil has lots of sun, wind, and rivers, so it should have one of the cleanest and cheapest energy sources in the world.” Almost 90 percent of Brazilians agree with this statement, according to a recent Abrace survey.

One of the reasons for the cost discrepancy is that only half of consumers’ bills cover energy generation, transport, and distribution. The rest pays...