Wednesday, October 24, 2012

The impact of petrol price rises

          Nowadays, we can see many vehicles are moving on the road. Almost every vehicle is using petrol to generate energy for the vehicle. Petrol is necessary to power a vehicle to move. Besides, petrol is non-renewable resources and being scarce in the world. However, the amounts of car owners are increasing every year. Therefore, the demand for petrol is highly but not perfectly inelastic demand to drivers. It means drivers still head to the petrol station despite the price is increased.

          The article from 
'The Sun' a newspaper's website  (http://www.thesun.co.uk/sol/homepage/news/money/4491722/Petrol-will-hit-a-new-record-high-within-a-MONTH-motoring-chiefs-warn.htmlis mentioning about the price of petrol is rising within two month. It will hit the new highest price of petrol. Drivers have to spend more on petrol in the beginning of July. According to the law of demand, as the price increase, the quantity demanded with decrease. The quantity demanded is varies inversely with the price as long as other things remain the same or ceteris paribus.







           From the graph A above, point A (the black dotted line) is the price and quantity demanded before the price rises. P1 is the price of petrol that is before the increase of price, Q1 is the quantity demanded before the rising of price. After the price rises, it shows by point B (the red dotted line), the price of petrol increases from P1 to P2. The quantity demanded also increases as well, which is from Q1 to Q2. Since petrol is relatively inelastic demand, the demand curve is steeper. Therefore, the percentage of change in quantity demanded is less than the percentage of change in price. In other words, the quantity demanded will have a little change, even though there is a high degree of change in price. Price inelastic demand is occurring if the goods or services are less substitution and it is necessity.




                  

            The change in total revenue is depending on the price elasticity of demand for the product. From the graph B above, the maximum total revenue is the price when the product is unit elastic demand. The arc on the left side of maximum total revenue (point A) is the change of total revenue when the price is changing on elastic demand product. In contrast, the arc on the right side of the maximum total revenue (point A) is the change of total revenue when the price is changing on inelastic demand product. The total revenue of elastic demand product increase when the price decrease; However, the total revenue of the inelastic demand product decrease when price decrease. Hence, as the demand for petrol is inelastic, the total revenue of suppliers will increase when the price is increasing.







          Besides that, the law of supply is when the price increase; the quantity supplied will increase. The quantity supplied will increase if the price raises and fall if the price falls, as long as other things do not change or ceteris paribus. From the graph C above, point A (the black dotted line) is the price and quantity supplied before the price rises. P1 is the price of petrol that is before the increase of price, Q1 is the quantity supplied before the increase of price. After the price rises, it shows by point B (the red dotted line), the price of petrol increases from P1 to P2. The quantity supplied will also increase from Q1 to Q2. The quantity supplied for petrol increases because the price rises and this allows the suppliers to gain more revenue. Surplus may occur because suppliers are trying to supply more while there are decreasing in demand. This will occur overproduction which is one type of market failure.

          Furthermore, the increasing of petrol price also will affect the investment of government in public transport. When the price of petrol rises, drivers are spending more money on petrol. Thus, consumers may prefer to use public transport rather than use their own car. The quantity demanded for public transport will increase. In order to prevent shortage in public transport, the government may spend more on the public transport to increase quantity supplied, for example purchase more buses and hire more bus driver. As there is more public transport supplied by government, the quantity supplied of public transport increases. Therefore, the quantity supplied of public transport will increase to meet the quantity demanded of public transport. Malaysia government is a good example in this situation. Malaysia government establish a company named as Rapid KL. It is a government-owned company that is operating the light rail transit (LRT), bus station and monorail in Kuala Lumpur, Malaysia. It helps to meet the high quantity demanded for public transport in Kuala Lumpur. This can reduce the shortage of public transport and smooth the transportation system.

          Ron 95 and Ron 97 are the two types of petrol that are standard at all petrol stations in Malaysia. The difference of the both types of petrol is the degree of energy that can be produced. The degree of energy produce by Ron 97 is more than Ron 95, so Ron 97 is more expensive. As petrol price rises, some drivers who are using Ron 97 may switch to use Ron 95 as substitution of Ron 97 in order to save money. The quantity demanded of Ron 95 will increase as more drivers are willing to use Ron 95. As the price of petrol is rising, the suppliers of petrol are willing to supply more Ron 95 to gain more revenue as well as meet the quantity demanded. Therefore, the quantity supplied of Ron 95 will increase. On the other hand, the quantity demand of Ron 97 will decrease. Since the price is rising and the demand for Ron 97 still exists, the suppliers of petrol will increase the production of Ron 97 to increase their revenue. However, the quantity demanded of Ron 97 will decrease because the price rises and substitution of Ron 95.

         In my opinion, I think the government should remove the subsidies on the petrol and increase the petrol price. As price of petrol is higher, the quantity demanded of petrol will decrease. Therefore, this will lead to decrease the usage of petrol and reduce the greenhouse gases in the world. Thus, we can life in a better quality of environment.

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  28. Are you in debt? Do you need an urgent loan to pay off your bills? if yes contact us today via Email on dwood5384@qq.com for more info about our loan programs

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  29. BLANK ATM CARD
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  30. Life indeed is GRACE, I'am Daan Sophia currently in California USA. I would like to share my experience with you guys on how I got a loan of $185,000.00 USD to clear my bank draft and start up a new business. It all started when i lost my home and belongings due to the bank draft I took to offset some bills and some personal needs. I became so desperate and began to seek for funds at all means. Luckily for me I heard a colleague of mine talking about this company, I got interested although i was scared of being scammed, I was compelled by my situation and had no choice than to seek advise from my friend regarding this very company and was given their contact number, getting intouch with them really made me skeptical due to my past experience with online lenders, little did i know this very Company "PROGRESSIVE LOAN INC. was a godsent to me and my family and the entire Internet World, this company has been of great help to me and some of my colleague and today am a proud owner of well organized business and responsibilities are well handled all thanks to Josef Lewis of (progresiveloan@yahoo.com).. So if really you are genuinely in need of a loan either to expand or start up your own business or in any form of financial difficulty, i advise you give Mr Josef Lewis of Progressive loan the opportunity of financial upliftment in your life Email: progresiveloan@yahoo.com OR Call/Text +1(603) 786-7565 and not fall victim of online scam in the name of getting a loan. thanks


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  32. Attention,
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  33. Are you looking for an urgent loan? I have a good news for you! We offer loans ranging from$1000 to $50 million at 3% interest rate per year.We offer Loans for business development, personal loans, auto loan etc, We are certified, trustworthy, reliable, efficient, fast and dynamic, If interested contact us at e-mail: willianloanfirm6@gmail.com

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  39. We are Ireland based major/Direct providers of Fresh Cut BG, SBLC, POF, MTN, Bonds and CDs and this financial instruments are specifically for lease and sale.We are one of the leading Financial instrument providers with offices all over Europe.
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  40. I am Maria from Texas. I was stuck in a financial situation in May 2016 and i needed to refinance and pay my bills. I tried seeking loans from various loan firms both private and corporate but never with success, and most banks declined my credit. But as God would have it, I was introduced to a Godly woman a private loan lender who gave me a loan of 620,000 EURO and today am a business owner and my kids are doing well at the moment, if you must contact any firm with reference to securing a loan without collateral , no credit check, no co signer with just 3% interest rate and better repayment plans and schedule, please contact jasmin noor Loan Company (jasminnoorloancompany01@gmail.com).

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  41. DO YOU WANT A PERSONAL/BUSINESS/INVESTMENT LOAN?

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  42. AVAILABLE PETROLEUM PRODUCTS ON FOB CI DIP AND PAY, CIF AND TTM PROCEDURE

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  43. We are Ireland based major/Direct providers of Fresh Cut BG, SBLC, POF, MTN, Bonds and CDs and this financial instruments are specifically for lease and sale.We are one of the leading Financial instrument providers with offices all over Europe.
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  44. Are you a business man or woman? Are you in any financial mess or do you need funds to start up your own business? Do you need a loan to start a nice Small Scale and medium business? Do you have a low credit score and you are finding it hard to obtain capital loan from local banks and other financial institutes?.

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  45. We are Ireland based major/Direct providers of Fresh Cut BG, SBLC, POF, MTN, Bonds and CDs and this financial instruments are specifically for lease and sale.We are one of the leading Financial instrument providers with offices all over Europe.
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    DESCRIPTION OF INSTRUMENTS:
    1. Instrument: Bank Guarantee (BG)/SBLC (Appendix A)
    2. Total Face Value: 10M MIN to 50B MAX USD or Euro
    3. Issuing Bank: HSBC, Deutsche Bank Frankfurt, UBS or any Top 25 .
    4. Age: One Year, One Day
    5. Leasing Price: 4+ 2%
    6. Sale Price: 32+2%
    7. Delivery by SWIFT .
    8. Payment: MT103-23
    9. Hard Copy: Bonded Courier within 7 banking days.
    If you have need for Corporate loans, International project funding, etc. or if you have a client that requires funding for his project or business, We are also affiliated with lenders who specialize on funding against financial instruments, such as BG, SBLC, POF or MTN, we fund 100% of the face value of the financial instrument.
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    ReplyDelete
  46. Dear Buyer/ Buyer mandate
    We currently have Available FOB Rotterdam/Hosuton for JP54,D2, D6, JetA1 with good and workable procedure, whereby buyer will dip test in seller tank with proof of product.
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    ReplyDelete
  47. Private Lender Avit Investment Authority.
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    ReplyDelete
  48. IQ FINANCE PLC provides a full financial planning service to both the commercial and domestic markets. At IQ FINANCE PLC we believe that financial planning is about two things: creating wealth and protecting wealth. These two objectives are at the heart of everything we do. And, as a member of IQ FINANCE Services, we give you a small-company service but with a large-company set up – the best of both worlds.

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    ReplyDelete
  49. GET FAST SECURED AND UNSECURED LOANS

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    ReplyDelete
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  51. Are you a business man or woman? Are you in any financial mess or Do you need funds to start up your own business? Do you need a loan to start a nice Small Scale and medium business? Do you have a low credit score and you are finding it hard to obtain capital loan from local banks and other financial institutes?. Interested applicants should Contact us via email: PergoCF@cheerful.com ( PergoCF@qualityservice.com ) PergoCF@gmail.com

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  52. ATTENTION ARE YOU IN NEED OF PERSONAL LOAN/INVESTMENT LOAN/BUSINESS FUNDING???Email: marianotorrezloans@gmail.com

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  74. I am a Broker to a Direct Mandate working with a reputable refinery, and we are to you, esteem buyers that the petroleum products you are looking for is available in our Tanks and Reservoir for immediate lift and supply.

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    3) MAZUT
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    7) D2
    8) D6
    9) REBCO
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    Kuznetsov GAVRIIL Mikhailovich

    ReplyDelete
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  86. I am a Broker to a Direct Mandate working with a reputable refinery, and we are to you, esteem buyers that the petroleum products you are looking for is available in our Tanks and Reservoir for immedaite lift and supply.

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  118. Hello,

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  135. Hello,

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  136. Hello,

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    2) MAZUT M100 10585-75/99
    3) JET FUEL JP54
    4) JET FUEL JPA1
    5) REBCO GOST 9965-76
    6) LPG (LIQUIFEID PETROLEUM GAS) GOST 20448-90
    7) BITUMEN GRADE 60/70 AND 80/100
    8) LNG( LIQUIFEID NATURAL GAS) GOST 5542-87
    9) D6 VIRGIN FUEL OIL
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    11) GASOLINE 89-92-93-95 OCTANE RUSSIAN ORIGIN
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  137. We are please to inform your esteem buying company the petroleum products you are looking for is available in our storage tanks and reservoir for immediate delivery. Such as:
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    2) MAZUT M100 10585-75/99
    3) JET FUEL JP54
    4) JET FUEL JPA1
    5) REBCO GOST 9965-76
    6) LPG (LIQUIFEID PETROLEUM GAS) GOST 20448-90
    7) BITUMEN GRADE 60/70 AND 80/100
    8) LNG( LIQUIFEID NATURAL GAS) GOST 5542-87
    9) D6 VIRGIN FUEL OIL
    10) AGO
    11) GASOLINE 89-92-93-95 OCTANE RUSSIAN ORIGIN
    12) EN 590 RUSSIAN ORIGINS

    Contact us via email to enable us issue our official soft corporate offer (SCO).

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    Tel: +79267435142
    skype: live:.cid.7c1618e5b501a9d2
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  138. HOW I GOT MY EX HUSBAND BACK WITH THE HELP OF REAL AND EFFECTIVE SPELL FROM DR Osasu My name is Olivia Jayden, I never thought I will smile again, My husband left me with two kids for one year, All effort to bring him back failed I thought I'm not going to see him again not until I met a lady called Jesse who told me about a spell caster called Dr. Osasu , She gave me his email address and mobile number and I contacted him and he assured me that within 48hours my husband will come back to me, In less than 48hours my husband came back started begging for forgiveness saying it is the devils work, so I'm still surprise till now about this miracle,i couldn't conceive but as soon as the spell was cast,i became pregnant and gave birth to my third child,if you need any assistance from him you can contact him via:email: drosasu25@gmail.com Or WhatsApp or call him now:
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  139. Dear Sir/Ma,

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  140. I am MrS. Elizabeth Morgan , an approved and certified lender with years of experience in lending i give out Collateral and Non Collateral loans with a fixed interest of 3% on an annual basis. 100% financing of projects with secured and unsecured loans available. We are guaranteed and capable of granting financial services to all our numerous customers all over the globe with our flexible lending packages. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies,business organizations, private individuals and real estate investors.

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  141. We are major/Direct providers of Fresh Cut BG, SBLC, POF, MTN, Bonds and CDs and this financial instruments are specifically for lease and sale.We are one of the leading Financial instrument providers with offices all over Europe.

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  145. Are You A Business Man Or Woman? Are You In Any Financial Mess Or Do You Need Funds To Start Up Your Own Business? Do You Need A Loan To Start A Nice Small Scale And Medium Business? Do You Have A Low Credit Score And You Are Finding It Hard To Obtain Capital Loan From Local Banks And Other Financial Institutes?. - Intermediaries / Consultants / Brokers Are Welcome To Bring Their Clients And Are 100% Protected. Interested Parties Should Contact Us For More Information Through Via E-mail:williamsgaige020@outlook.com

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  146. Dear Sir/Ma,

    We are genuine certified Financial Instrument providers. Presently, we only focus on BG/SBLC for Lease and purchase purposes. Our Lease BG/SBLC is 4+2% and purchase at 32+2%.

    * FOR LEASING OF BG/SBLC
    MINIMUM FACE VALUE OF BG/SBLC = EUR/USD 1M
    LEASING FEE = 4%+2%

    * FOR PURCHASE OF FRESH CUT BG/SBLC
    PRICE = 32%+2%
    MINIMUM FACE VALUE OF BG/SBLC = EUR/USD 1M

    Kindly contact us for our procedures and be sure that we shall respond within 48hrs maximum.

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  147. Cool way to have financial freedom!!! Are you tired of living a poor life, here is the opportunity you have been waiting for. Get the new ATM BLANK CARD that can hack any ATM MACHINE and withdraw money from any account. You do not require anybody’s account number before you can use it. Although you and I knows that its illegal,there is no risk using it. It has SPECIAL FEATURES, that makes the machine unable to detect this very card,and its transaction can’t be traced .You can use it anywhere in the world. With this card,you can withdraw nothing less than $4,500 a day. So to get the card,reach the hackers via email address : besthackersworld58@gmail.com or whatsapp him on +1(323)-723-2568

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  149. I want to share my testimony on how i got the blank ATM card. I was so wrecked that my company fired me simply because i did not obliged to their terms, so they hacked into my system and phone and makes it so difficult to get any other job, i did all i could but things kept getting worse by the day that i couldn’t afford my 3 kids fees and pay my bills. I owe so many people trying to borrow money to survive because my old company couldn’t allow me get another job and they did all they could to destroy my life just for declining to be among their evil deeds. haven’t given up i kept searching for job online when i came across the testimony of a lady called Judith regarding how she got the blank ATM card. Due to my present state, i had to get in touch with Hacker called OSCAR WHITE of oscarwhitehackersworld@gmail.com and he told me the procedures and along with the terms which i agreed to abide and i was told that the Blank card will be deliver to me without any further delay and i hold on to his words and to my greatest surprise, i received an ATM card worth $4.5 million USD , All Thanks to OSCAR WHITE , if you are facing any financial problem contact him asap email address is oscarwhitehackersworld@gmail.com or whats-app +1(323)-362-2310

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  152. Dear Sir/Madam,

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  153. Dear Sir/Madam,

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    Email: jsc.uraloil@bk.ru
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    ReplyDelete
  154. Dear Sir/Madam,

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    ReplyDelete
  155. Dear Sir/Madam,

    We are direct end seller refinery company for the supply of Petroleum products. Currently we are allocating our products on discount platts to capable buyers, we have available Jet fuel, D2 Gas oil, D6, EN590, JETA1, for capable buyer lift in Houston and Rotterdam commercial sea ports and also on CIF basis to any safe world port. Kindly Contact us via: jsc.uraloil@bk.ru for SCO.


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    Email: jsc.uraloil@bk.ru
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    ReplyDelete
  156. Dear Sir/Madam,

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    Kind Regards.
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    Email: jsc.uraloil@bk.ru
    Skype: jsc.uraloil@bk.ru

     

    ReplyDelete
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  160. Dear Sir/Madam,

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    Email: jsc.uraloil@bk.ru
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  162. GENUINE BANK GUARANTEE (BG) AND STANDBY LETTER OF CREDIT (SBLC) FOR LEASE AT THE LOWEST RATES AVAILABLE. OTHER FINANCIAL INSTRUMENTS SUCH AS MTN, CD, DLC, PB ARE ALSO AVAILABLE.

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  166. Dear Sir/Madam,

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    ReplyDelete


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