Latin America has glaring infrastructure problems. The region is highly dependent on roadways, meaning that the population is left severely exposed to alterations in fuel prices. Last year, truckers nearly brought Brazil to a complete halt, striking for ten days in protest against the extreme volatility of diesel costs. In Ecuador, fuel price increases sparked a series of demonstrations that led to eight deaths, 1,300+ injured, over 1,000 arrests and the declaration of a state of emergency.
Brazil and the Petrobras dilemma
As we’ve explained in the past, the federal government has a major role in dictating fuel prices in Brazil. That’s because Petrobras, the state-owned oil giant, controls roughly 98 percent of the oil refining market.
This situation has opposed government officials...
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