the recent discourse around "'horrendous' gas prices in the US" reminded me that exchange rates are misleading ! and many people don't realise this. exchange rates do not account for the relative cost of living between countries, and so it doesn't actually show how expensive things *feel* for the average citizen in a real and practical sense.
for example, take the fuel prices as of today, 20 July 2026. with the price from the state of New York (source) converted to litres, and the prices from Europe (source) and South Africa (source) converted to US Dollars at today's exchange rates of $1=€0.88 and $1=R16.51 (per Google)
United States (N.Y.): US$ 4.15 /gallon = US$ 1.09 /ℓ
Germany (average): EUR 2.10 /ℓ = US$ 2.40 /ℓ
Spain (average): EUR 1.54 /ℓ = US$ 1.76 /ℓ
South Africa (coastal): ZAR 25.23 /ℓ = US$ 1.53 /ℓ
and that's where people usually stop. but it doesn't account for the relative cost of living in each country. like yeah, $2.40/ℓ in Germany is objectively higher than $1.53/ℓ in S. Africa, but the average salary (even in low-paying jobs) is much higher in Germany than in S. Africa, so this doesn't really reflect how much of a burden that is, relatively, to the average person
so we need to adjust the rates for PPP (purchasing power parity) of each currency. this takes into account the average cost of groceries, good and services, average salaries and wages and other market factors, etc. I'm using the latest IMF Rates from April 2026 (source)
United States: 1:1 PPP rate = Intl$ 1.09 /ℓ
Germany: 1:0.72 PPP rate = Intl$ 2.92 /ℓ
Spain: 1:0.60 PPP rate = Intl$ 2.56 /ℓ
South Africa: 1:7.49 PPP rate = Intl$ 3.37 /ℓ
notice how Germany and Spain have different PPP rates, despite both using the Euro, because it's based on local cost of living. and how South Africa, like many countries in the global south, has a drastically undervalued currency. which makes things cheap for tourists here, but is Not Great for locals.
and to be clear, this isn't just about fuel and oil and the US war on Iran. the exchange rates are always misleading like this