'Lower class will have to tighten their belts and pay' - Fuel price hike hits Chile as Middle East war sends costs soaring

"A fuel price increase of up to 30 per cent came into effect in Chile on Thursday, after the government announced that the move was driven by a rise in international oil prices linked to the conflict in the Middle East. Footage shows petrol stations standing empty after days of long queues, as motorists rushed to fill up ahead of the hike in an effort to soften the blow. "It is clear that the increase in oil prices is the result of this war between the United States, Israel and Iran, which is creating inflationary pressure in Chile," said Victor Salas, economist and academic at the Faculty of Administration and Economics at the University of Santiago. In response, some citizens began to adjust their daily routines as fuel prices rose, turning to alternative ways of getting around. "I gave up having a car; we decided to walk, cycle and return to a healthier way of life. This trend was expected, but now it has all come at once," said a resident. But the rise in fuel prices is not the only concern as many fear it will drive up the cost of basic goods, while others blame the government for the sharp increase. "The government is 100 per cent responsible; it went up by nearly 400 pesos overnight. When petrol prices go up, the price of everything else rises as well, transport, potatoes, milk. It affects everything deeply," said another resident. "I believe this will change the entire economy for the lower social class, because people and daily consumption will see their daily spending increase. People will have to regulate more, tighten their belts, but there is nothing that can be done now," he added. Swings in international crude oil prices hit fuel-importing countries such as Chile directly, as part of the increase is passed on to consumers, said Victor Salas, economist and academic at the Faculty of Administration and Economics at the University of Santiago, warning that the local economy faces a slow recovery. "We are going to see a weak recovery in inflation; this will bring not only inflation but also recession, and I think that is quite serious for the economy," he added. On 23 March, Chile's Finance Minister Jorge Quiroz announced a fuel price increase of up to 30 per cent, with 93-octane petrol rising by 370 Chilean pesos per litre and diesel going up by between 570 and 580 pesos. In a televised address on Thursday morning, President Jose Antonio Kast announced the Energy Emergency Law approved by Congress, aimed at softening the impact of rising fuel prices by reactivating economic stabilisation measures and helping reduce the cost of domestic kerosene used to heat homes in winter."

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