Assessing the Impact of Demand, Import, Taxes and OPEC on Petrol Prices

Abstract

Importance of petrol in our daily life is visible and it is a strategic fuel for economic lifeline. The price of petrol between Pakistan and other most costly fuel consuming countries is 100% to 175% higher. But if the per capita income is taken into the report the difference goes up. It is estimated that petrol prices in Pakistan is worked out to be costly as 6.64 times in Japan, .75 times in Norway and 5.3 times in UK. Pakistan is placed on 158^th rank on the basis of per capita income, but in terms of petrol prices it is placed on 59^th number for the most expensive petrol from 153 countries. The main emphasis of our research report is to find out what are the subsequent factors for the fluctuation of petrol prices and collecting the data regarding the reason. In this analysis we found out the major causes that how demand; import, taxes and OPEC affect the petrol prices in Pakistan. Secondary data has been collected from a variety of journals and reports and primary data from questionnaire and interviews. The sample size of 52 is applied and for testing the hypothesis the process of linear regression is applied to examine the impact of independent variables on dependent variables. It is recommended that Government should generate appropriate strategy for the equilibrium of oil demand, should drill their own wells to maintain oil import in Pakistan and should take initiatives for the suitable and stabilize tax rate.

Keywords: Demand, OPEC, Import, Taxes