Swiss petrol remains cheap despite two-franc litre price

Petrol prices at many Swiss filling stations have reached two francs per litre, but measured against average incomes, Switzerland remains one of the countries where filling a tank costs the least, SRF reported. Philippe Thalmann, an economics professor at EPFL Lausanne, said petrol places a much smaller burden on Swiss household budgets than in almost every other country.

In Vietnam, a litre of petrol costs the equivalent of about 16 Swiss francs when measured against local incomes. The actual price is around half the Swiss level, but buying the same amount of fuel places eight times as much pressure on incomes there, according to Thalmann.

Vietnam is not the most extreme example. Measured against incomes, a litre of petrol would cost the equivalent of 33 francs in Ghana and 65 francs in Nepal.

Higher oil prices have helped drive a sharp increase in electric-car purchases in Vietnam since the outbreak of the Iran war. A comparable development has not been seen in Switzerland. Thalmann said similarly high fuel prices in Switzerland would probably encourage people to save fuel, switch to more efficient or electric cars, or use forms of transport that do not require petrol.

Historical comparisons also suggest that fuel is not particularly expensive today. After the second oil crisis in the late 1970s and early 1980s, petrol in Switzerland cost 1.25 francs per litre. Adjusted for inflation, that would be almost 2.37 francs today, while adjusted for purchasing power it would be 3.50 francs.

Modern vehicles have also become much more efficient. A current car with a combustion engine uses about half as much petrol per 100 kilometres as a vehicle did 40 or 50 years ago, despite modern cars being heavier and more powerful. As a result, one tank now takes a car about twice as far as it did in the past.

There is currently no clear sign that the two-franc price is changing behaviour in Switzerland. Traffic data from the Federal Roads Office indicate that traffic volumes this year are tending to be higher than last year, while electric-car registrations have not risen sharply.

Oil prices have risen again, with Brent crude currently costing around 100 dollars a barrel. A low level of the Rhine is also making it more expensive to transport petrol and diesel to Switzerland.