For petrol, Indians shell out the most in the world

For all those already reeling under a series of hikes in petrol prices on the back of zooming inflation, here is some news that will enrage you further. Data of retail prices in countries across the world shows that Indian prices are amongst the highest in the world at current exchange rates. And, if you even out the differences in purchasing power of different currencies then Indian petrol and diesel prices become the highest barring some tiny, remote countries.

Even a simple comparison of retail prices in different countries by converting them to Indian rupee reveals that petrol in India is more expensive than 98 other countries. Among 157 countries for which data is available, those belonging to the Organization of Petroleum Exporting Countries have the lowest price.

The Organisation of Petroleum Exporting Countries (OPEC) are the ones that have huge oil reserves and are its main producers. So, petrol is cheapest in Venezuela at just Rs 1.14 per litre. In Iran it sells for Rs 4.8 per litre. The second group comprises of countries like the US, Iraq, Indonesia, etc, where minimal tax is levied on petroleum products. They also have lower prices than India. A litre of petrol costs Rs 42.82 in the US.

India tops the group of countries which have moderate to high tax regimes. Others in the group are the EU countries and others like Singapore, New Zealand, Thailand and Brazil. At Rs 69.90 -the average price of petrol in 24 Indian cities -Indian prices are now comparable to price of petrol in EU. Romania has EU's cheapest petrol at Rs 72.33 per litre.

However, price comparisons done like this - by converting into one currency using the exchange rate - are deceptive. Petrol prices equivalent to Rs 96.39 in the UK might not pinch the English in the same way as Rs 69.90 will clobber Indians.

So, how does one compare prices across countries? This is done by the widely used Purchasing Power Parity (PPP) method. Differences in purchasing powers are evened out and relatively real price comparisons emerge. Using PPP prices, petrol is by far much more costlier in India than most countries. PPP price of petrol in India is $3.95, lower than just three small countries - Timor-Leste, Malawi and Eritrea.

Petrol costs less than a dollar in the OPEC and USA while in most of Europe, Russia, Japan, China and the Americas it is priced between one to two international dollars by PPP calculations. Despite huge subsidies, diesel is more expensive in India than 136 other countries. Costing $2.46 at PPP, India is 23rd most expensive in diesel prices. Can anybody explain why Indians have to bear this unbearable burden?