"... what is a "non-toxic" volatile oil? Is it petroleum based?"
Some are vegetable based, others are petroleum based. Petroleum is not inherently toxic, it depends how it was processed.
"But they are prohibitively expensive for wide-spread application in most 3rd world nations."
I'm not sure what third world nations you've been going to but there is no shortage of pesticides.
Many can and are produced locally. One of the many hats I have worn over the years was as the owner of a wholesale nursery. The insect control for the entire nursery was managed with a combination of Pyrethrins (extracted from a flower Chrysanthemum cinerariifolium) a bacteria Bacillus thuringiensis to kill the larva that fed on the penstemons, garlic to control mold on the salvias and soap to kill just about everything else.
The soap works very much like the oil, it mechanically smothers then.
You can develop a tolerance to alcohol, it's much more difficult to develop a tolerance to a plastic bag over your head.
Pyrethrins and pyrethroids interfere with the normal way that the nerves and brain function. Exposure to very high levels of these compounds for a short period in air, food, or water may cause dizziness, headache, nausea, muscle twitching, reduced energy, changes in awareness, convulsions and loss of consciousness. Changes in mental state may last several days after exposure to high levels of pyrethroids has ended. There is no evidence that pyrethrins or pyrethroids affect the ability of humans to produce children, but some animal studies have shown reduced fertility in males and females.
DDT on the other hand was never shown to have adverse health effects, even in exposure many times a maximum credible dose.
You will also note that pyrethrins have an effective period of about 2 days, requiring frequent treatment. DDT is effective in low concentrations indoors for a month or more, which makes it so effective in controlling malaria outbreaks in remote tropical regions where mosquitoes are most active after dark.