python - unable to install a package using pip

I'm triying to install a package using pip inside a virtualenv:

pip install fuse-python

but the output is

Downloading/unpacking fuse-python
  Downloading fuse-python-0.2.tar.gz (53kB): 53kB downloaded
  Running setup.py (path:/home/nicu/dev/bacula/ve/build/fuse-python/setup.py) egg_info for package fuse-python
    Usage: pkg-config [-?] [--version] [--modversion]
            [--atleast-pkgconfig-version=VERSION] [--libs] [--static]
            [--short-errors] [--libs-only-l] [--libs-only-other] [--libs-only-L]
            [--cflags] [--cflags-only-I] [--cflags-only-other] [--variable=NAME]
            [--define-variable=NAME=VALUE] [--exists] [--print-variables]
            [--uninstalled] [--atleast-version=VERSION] [--exact-version=VERSION]
            [--max-version=VERSION] [--list-all] [--debug] [--print-errors]
            [--silence-errors] [--errors-to-stdout] [--print-provides]
            [--print-requires] [--print-requires-private] [-?|--help] [--usage]
    pkg-config could not find fuse:
    you might need to adjust PKG_CONFIG_PATH or your
    FUSE installation is very old (older than 2.1-pre1)
    Traceback (most recent call last):
      File "", line 17, in 
      File "/home/nicu/dev/bacula/ve/build/fuse-python/setup.py", line 69, in 
        iflags = [x[2:] for x in cflags.split() if x[0:2] == '-I']
    NameError: name 'cflags' is not defined
    Complete output from command python setup.py egg_info:
    Usage: pkg-config [-?] [--version] [--modversion]
        [--atleast-pkgconfig-version=VERSION] [--libs] [--static]
        [--short-errors] [--libs-only-l] [--libs-only-other] [--libs-only-L]
        [--cflags] [--cflags-only-I] [--cflags-only-other] [--variable=NAME]
        [--define-variable=NAME=VALUE] [--exists] [--print-variables]
        [--uninstalled] [--atleast-version=VERSION] [--exact-version=VERSION]
        [--max-version=VERSION] [--list-all] [--debug] [--print-errors]
        [--silence-errors] [--errors-to-stdout] [--print-provides]
        [--print-requires] [--print-requires-private] [-?|--help] [--usage]
pkg-config could not find fuse:
you might need to adjust PKG_CONFIG_PATH or your
FUSE installation is very old (older than 2.1-pre1)
Traceback (most recent call last):
  File "", line 17, in 
  File "/home/nicu/dev/bacula/ve/build/fuse-python/setup.py", line 69, in 
    iflags = [x[2:] for x in cflags.split() if x[0:2] == '-I']
NameError: name 'cflags' is not defined
----------------------------------------
Cleaning up...
Command python setup.py egg_info failed with error code 1 in /home/nicu/dev/bacula/ve/build/fuse-python
Storing debug log for failure in /home/nicu/.pip/pip.log

as far as i can tell there's something wrong with pkg-config and PKG_CONFIG_PATH

I'm running ubuntu 14.04,
and the output of dpkg -l | grep is (so my fuse installation is not 'too old '):

ii  fuse                                        2.9.2-4ubuntu4                                      amd64        Filesystem in Userspace
ii  gvfs-fuse                                   1.20.1-1ubuntu1                                     amd64        userspace virtual filesystem - fuse server
ii  ifuse                                       1.1.2-0.1                                           amd64        FUSE module for iPhone and iPod Touch devices
ii  libfuse2:amd64                              2.9.2-4ubuntu4                                      amd64        Filesystem in Userspace (library)

UPDATE:
i installed it using sudo apt-get install python-fuse but that installed it globally:

ii  python-fuse       2:0.2.1-9   amd64    Python bindings for FUSE (Filesystems in USErland)