UK fuel market retail pricing research

Description of the supply chain of UK transport fuel sector and Supply Chain……………………………………………………………………………………. … Conclusion ………………………………………………………………………………… References …………………………………………………………………………………. List of figures Figure 1. 0……………………………………………………………………………………12 Executive Summary Purpose of Economic Market Analysis Economic market analysis generally means the factors or the forces which are used to determine how the scarcely resources are distributed. It provides a clear picture on how the certain markets operate and also tries to provide the picture on how the market works offering the methods to forecast the future market behaviour in relation to the cycles, trends, and also the past statistics. It provides a clear picture on how the certain markets operate and also tries to provide the picture on how the market works offering the methods to forecast the future market behaviour in relation to the cycles, trends, and also the past statistics.

This analysis is also a crucial factor used by the government to determine the tax rates and also in evaluating the health of financial department within a given country. This paper will analyse the economy of the U. K road transport fuel market. It will use the relevant economic model and theoretical analysation too. Given that all conditions remain constant, the demand curve slopes downwards with increase in prices leading to decrease in quantity demanded. Suppliers supply commodities depending on the cost and benefits or profit implications. They maximise profits. The supply curve displays quantities of commodities supplied at varied prices, as the prices increase, the quantity supplied increases given that all other factors remain constant. The theory is very vital in showing the price mechanism.

, n. d. UK road transport fuel covers almost the all parts of the nation since road is the main mode of transport. The main types of fuel products in the United Kingdom include the gas oil, diesel, petroleum, biodiesel, liquefied petroleum gas and also the lubricants. The government has involved itself in the road fuel products through taxation and the policies which see the sectors involved either favoured or abused. Upward increase in the prices of fuel products is caused by the market forces such as inflation, demands, cost of crude oil and also refined oil. Other factors include the global activities like fights, shortage of gases, threats due to security and also continuous change in technology. We shall look on the average rise in prices of the fuel prices in the last 15 years using the past data of UK about the fuel prices (Anon.

, n. d. 1 Nov 75. 2 Dec 77. 8 From the table you can see the trend that is involved in the prices of the unleaded fuel over the last fifteen years. This is an indication that it has been rising over the years. Secondly, the trends in prices from the year 1998 up to 2018 show an increase in prices each year. Congestion Effects The roads have become more congested due to the rise in population hence people have shifted to other means of transport thus reducing the demand of road transport which reflects a negative implication to the supply and demand of road transport fuels industry. Household Disposable Income According to the Office for National Statistics report on Household disposable income and inequality in the UK, the consumer’s disposable income keeps on changing from time to time.

The statistician’s comments, the consumers income nowadays is high than ever hence making a clear indication that the consumers in the region are able to purchase road transport fuels at the prevailing conditions (Becker 2017). Based on the demand and supply theory, an increase in customers’ disposable income leads to an increase in the consumer’s purchasing power. In case of an increase, as quoted by the report above, the consumers of fuels will buy more of the products in the market. The tax rates range from 0-475 Euros. Road Transport Fuel Price Elasticity estimates in the UK Price elasticity measure how the quantity demanded of a product is responsive to price changes. According to the Department of Energy and Climate Change, the price elasticity of demand as at 2012 was -0.

It was found to be price inelastic because it is not majorly affected by price fluctuations. Since petroleum products are not necessities, their demand is inelastic. About 85% of the demand of crude oil products in the UK domestic market is supplied by UKPIA. The oil products are supplied by sea (34%), rail (15%) and pipeline transports 34% of the products. A good example of a product from oil is diesel. It is either supplied to the terminals by rail, road or sea. When the suppliers want to meet the demand at the southern of the country, they heavily depend on pipeline that connects major towns and cities. Taxation in UK affects much the pricing of road transport fuels. The prices for these products have recorded a rising trend.