It's all about cost of living

2013-07-18 10:52
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petrol, fuel, gas, (Shutterstock)
Although petrol in Canada is more expensive when comparing exchange rates, it is actually much cheaper than in SA, says a Fin24 user.

He was responding to an article on Fin24 which stated that compared with other countries in the world, South African motorists are still better off.

Michael Prinsloo, who lives in Canada wrote: "Here in Canada we call it gas. It's basically the same thing but gas is a bit cheaper than petrol.

"The current price is around $1.40 per litre for 89 octane. Petrol prices vary daily and with location. We have a website where we can see petrol prices to find cheaper petrol.

"I think our petrol is cheaper than in South Africa. On the exchange rate it might be more, but that is my problem with your comparison. You can only use exchange rates for tourists.

"If you want to compare what we pay here to what you pay over there for someone living in South Africa as opposed to someone living in Canada, you have to use cost of living rate.

"A lot of people do not understand this concept. I might earn $10 000 per month ($62.50/hr) here, so $1.40 is 2.244% of my hourly rate. What is the same salary I would be earning in South Africa? Lets say R25 000 per month (R144.23/hr).

"In SA it is 9.0133% of the hourly rate. So is it really cheaper? I just made a simple relative comparison in terms of %. You should really do a comparison of a basket of items including mortgage, food, clothes and vehicle financing to get an accurate cost of living number.

"I would say it is less than the exchange rate for Canada, but it could be different for other countries based on the cost of the basic items.

"I just used an inflation escalation of the last salary I earned as an engineer at 7% per year for 11 years."

- Fin24

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