New Delhi: The per litre cost of LPG in India is the highest, the price of petrol is the third highest, and diesel is the eighth most expensive in the world, based om the purchasing power of currencies in their domestic market.
Price comparisons at the nominal exchange rate (the rate at which currencies are traded on the international market) obscure the fact that various currencies have varied buying power in their respective markets.
Furthermore, income levels vary so significantly between countries that a litre of petrol costs a quarter of an average Westerner’s daily salary, a fourth of an average Indian’s daily income, and more than the average daily income in Burundi.
For instance, the average price of a kilo of potato was $1.94 in March in the United States of America (globalproductprices.com). This amounts to Rs 147 at the current currency rate, which could buy more than 7 kilos of potatoes in March in India UK (prices of ministry of consumer affairs). That’s why, to make a more accurate comparison of domes and costs in different countries, economists use the PPP dollar, or international dollar, which considers how much each currency can buy in its own market. According to IME, the PPP or international dollar averaged 22.5 in 2022, not 75.84 as previously reported.
According to IMF estimates, the comparable price of petrol in India is 52 international dollars per litre, the world’s third-highest behind Sudan (Int $8) and Laos (Int $5.6) among the 157 nations for which pricing data (globalpetrolprices.com) and IMF’s PPP conversion rates are available.
Albania is the only other country with a price higher than Int $5. The price in the West varies from Int $1.2 in the United States and Int $1.5 in Japan to ran Int $25 in Germany and ran Int $2.7 in Spain, all of which are significantly less than the price in India. LPG prices are provided for 54 nations, with India’s at Int $3.5 per litre being the highest in the world. Turkey, Fiji, Moldova, and the United Kingdom round out the top five. In comparison, LPG costs around Int $1 per litre in Switzerland, France, Canada, and the United Kingdom.
Apart from price, accessibility is a critical element in determining how much it pinches mines. In a high-income country, a greater price has a far less impact on an individual’s wallet than in a low-income country.
In its report, The Times of India compared the prices of a litre of petrol and diesel and LPG with the IMF’s estimate of a country’s GDP per capita at a daily level.
Petrol prices range from from 0.6% of the daily income of a an average American to 22% of the daily income of an average person in Spain. On the other hand they are 23.5% of the daily income of an average Indian is 23.8% for an average Pakistani, 38,2% for and average Nepali and a staggering 181.8% for an avarage person in Burandi, Diesel and LPG also show similar trend.
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