042013
India’s petro products among the lowest in the world: World Bank Study
According to a recent policy research paper by the World Bank, India is among those countries in the world where the prices of petroleum products are at the lower end.
The study by World Bank, ‘Petroleum Product Pricing and Complementary Policies — Experience of 65 Developing Countries Since 2009’, found that the lowest prices of key petroleum products were found in Venezuela and Egypt, closely followed by Iran and Iraq for gasoline and diesel, Indonesia and India for kerosene, and Iraq and Bolivia for Liquefied Petroleum Gas (LPG). Venezuela stands out as having petroleum product prices far lower than in any other country, with the exception of LPG, for which the official price in Egypt was even lower.
According to the report, about two-thirds of the countries included in the study have kept domestic prices below market-clearing levels for one or more fuels in the past three years, thus subsidising consumers. It adds that with the inclusion of additional burden sharing by the oil and gas companies, fuel subsidies amount to about 2% of the GDP.
Notifying the different prices by end use in LPG, the report said the differences in unit prices have been as large as 280% favouring LPG sold in small cylinders in India , 220% in Tunisia , 175% in Indonesia , and 170% in Thailand .
Meanwhile, according to the Petroleum Planning and Analysis Cell (PPAC), the prices of LPG and kerosene in India are lowest compared to its neighbouring countries. While kerosene prices in India are at Rs. 14.79, that of Pakistan is Rs. 56.05, Bangladesh is Rs. 40.82, Sri Lanka is Rs. 44.62 and Nepal is Rs. 60.41. Furthermore, the prices of LPG for 14.2 kilo gram cylinder in India is Rs. 410.5 compared to Rs. 919.6 in Pakistan, Rs. 533.21 in Bangladesh, Rs. 1,151.4 in Sri Lanka and Rs. 911.86 in Nepal.
Oil companies in India are suffering an under-recovery of Rs. 6.52 a liter on the sale of diesel, Rs. 30.49 a liter on kerosene and of Rs. 434.50 per cylinder on LPG. During the April to December period, the under-recovery on diesel stood at Rs. 73,815 crore, kerosene at Rs. 21,891 crore and LPG at Rs. 29,148 crore.
Warm regards,
Dr. S P Sharma
Chief Economist
_________________________________
PHD Chamber of Commerce and Industry
August Kranti Marg, New Delhi – 110016
Tel 91 11 49545454, Fax 91 11 26855450,
Mobile 91 9910946767
E mail – spsharma@phdcci.in
Website http://www.phdcci.in
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