A study by World Bank shows that about two-thirds of the developing countries (considered in the study) have kept domestic prices of one or more petroleum products below market-clearing levels in the past three years.
It adds that with the additional burden sharing by the oil and gas companies included, fuel subsidies amount to about 2 per cent of the GDP.
The multilateral lending institution recently conducted a study titled ‘Petroleum Product Pricing and Complementary Policies — Experience of 65 Developing Countries Since 2009’.
The study found that the lowest prices 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).
Prices of petroleum products, except LPG, are far lower in Venezuela than in any other country considered in the study. The official price of LPG is lower in Egypt.
The prices of LPG and kerosene in India are lowest compared to its neighbouring countries, according to the Petroleum Planning and Analysis Cell.
Oil Marketing Companies (OMCs) are incurring an underrecovery of Rs 6.52 a litre on diesel, Rs 30.49 a litre on kerosene and of Rs 434.50 per cylinder on LPG.
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