The Petrol Market Prices: Memorandum of Transmittal (Term Paper Sample)

MEMORANDUM OF TRANSMITAL
To:
From:
Date:
Subject:
In reference to the request for examination of the trend of the petrol market, kindly find attached the report for the retail petrol prices in New Zealand. The report was requested by the New Zealand Automobile Association. The aim of the report is to provide reliable findings to secure competitive petrol prices that would ensure the operation of a cohesive market. Further, this research reports reviews on the factors that affect the petroleum prices. The project involved examination of the retail prices in different petrol stations for a period of two weeks, and a comparison of the same to the international crude oil prices. Similarly, as requested, the report has also touched on the impact of the larger economies. Other examples have also been highlighted in the report.
Therefore, I have obtained the following key findings out of the research process:
The structure of the cooperate ownership petrol retailers in New Zealand.
Setting of petrol price putting into consideration taxation all taxation factors, refining costs, crude oil prices, fluctuation in exchange rate, and excise.
Affordability of petrol price with repect to values of wage in NZ.
Presence of presence of findings in the studies petrol markets inNew Zealand.
Presence of uncompetitive pricing the petrol market in New Zealand.
Analysis of how AA taken steps to lobby for affordable and cheap prices of petrol among members. This should have measures for interventioning to promote AA.
Kindly let me know if there is any question as regards this research report. An acknowledgement goes to all those personalities who assisted with the research and its compilation.
The Trend of Retail Petrol Prices in New Zeeland
A report prepared by (….) for the New Zealand Automobile Association
Prepared by:
Reviewed by:
Tutor:
Paper:
Date:
Abstract
This report evaluates the structure and trend of the retail petrol prices in New Zealand. The report is based on an analysis of the recorded data on the retail petrol prices collected from various petrol stations for a period of two weeks. The demand for petrol is disadvantaged by the improved technology; the vehicles are more energy efficient. The report finds out that the demand for petrol and petroleum products grows at an average rate of 4% yearly, hence the price trend. The main refineries are also the main wholesalers who also run the greatest portion of retail chains in the country. These include the Shell, BP, Mobil, and Caltex and they contain a stake of 14.3% at a time. The government should enact competition laws to monitor and control the petrol prices to be free of exploitation. Such initiatives would help to deal with the 4% annual price increment.
Table of Contents
 TOC \o "1-3" \h \z \u  HYPERLINK \l "_Toc429841526"
Abstract  PAGEREF _Toc429841526 \h
iv
 HYPERLINK \l "_Toc429841527"
1. Introduction  PAGEREF _Toc429841527 \h
1
 HYPERLINK \l "_Toc429841528"
1.1 Background Information  PAGEREF _Toc429841528 \h
1
 HYPERLINK \l "_Toc429841529"
2. Findings  PAGEREF _Toc429841529 \h
1
 HYPERLINK \l "_Toc429841530"
2.1 Uses of Petrol  PAGEREF _Toc429841530 \h
1
 HYPERLINK \l "_Toc429841531"
2.2 Structure of Corporate Petrol Retailers in New Zealand  PAGEREF _Toc429841531 \h
3
 HYPERLINK \l "_Toc429841532"
2.3 The Demand and Supply Conditions  PAGEREF _Toc429841532 \h
4
 HYPERLINK \l "_Toc429841533"
2.4 The Market Structure  PAGEREF _Toc429841533 \h
4
 HYPERLINK \l "_Toc429841534"
3. Discussion  PAGEREF _Toc429841534 \h
5
 HYPERLINK \l "_Toc429841535"
3.1 Steps For The Automible Assoociation  PAGEREF _Toc429841535 \h
5
 HYPERLINK \l "_Toc429841536"
3.2 Factors for the Determination of the Petroleum Price  PAGEREF _Toc429841536 \h
5
 HYPERLINK \l "_Toc429841537"
4. Conclusion  PAGEREF _Toc429841537 \h
6
 HYPERLINK \l "_Toc429841538"
5. Recommendations  PAGEREF _Toc429841538 \h
6
 HYPERLINK \l "_Toc429841539"
References  PAGEREF _Toc429841539 \h
8

Introduction
1.1 Background Information
The automotvive industry has a pure motivation to manufacture, assemble and trade their automobiles. It is their concern to know about the other factors that affect the demand for the automobiles. The prices of petrol is therefore of vital concern to the industry. The New Zealand Automobiles Associations have realized reduced earnings and demand for the automobiles in the two successive years (Alom, & Ritson, 2012). Hence, they commissioned the development of this report to point on how the structure of the retail petrol prices as a factor in the demand for the automobiles, hence the purpose of the report. The scope of the research involved examination and analysis of the records about petrol prices from a number of retail petrol stations. The data collected was for a period of two weeks. Further, the retail prices in the nation were compared to the international oil prices to ascertain instances of exaggerated prices in New Zeeland. Basically the collected data were secondary data from the petrol stations prices records. The research report is however limited of the fact that the records made by the petrol stations may have not been genuine records and hence there was need for more time to collect first hand data. On the other hand, the report only considers the prices that are listed by the retail stations but ignores the perception of the owners of the automotive about the prices of the automotives. Further, the thesis statement of this research involves, making efforts to secure the competitive petrol prices will ensure the operation of a cohesive market.
Findings
2.1 Uses of Petrol
The petroleum refers to a complex mixture of the organic liquids known as the crude oil and the natural gas (Boshier, 2013). Individuals mostly tend to believe that the petroleum is mostly used for powering the internal combustion engines. However, petroleum is consumed for the vast array of application, although other forms of transport and automobiles consume the highest quantity of the petroleum. In thickest form, the bitumen, is used in the paving of a road and is similarly excellent water repellant. It is further used in roofing of the houses. Consequently, the greatest portion of the plastics and the synthetics is composed of petroleum. Similarly, petroleum is used in the composition of foodstuffs such as the beers as well as in the medications such as the asprins (Harvey, & White, 2012). In totality, the world contains a limited quantity of petroleum as researchers’ prospect that in the near decades the petroleum products will be depleted by the mankind. Again, it is evident that the humankind faces a greater problem as concerns the reduction in the supply of the petroleum products. However, more significant strides have been made as concerns the use of cheap and renewable fuel options as a substitute.
2.2 Structure of Corporate Ownership of Petrol Retailers in New Zealand
The fuel industry in New Zealand is majorly a factor of imported fuel. The fuels are imported from the refiners such as the Asia, Australia, Korea and the Singapore. The production at the Marsden Point is supplemented by the four primary oil companies that deal with the imports of the oil and diesel. Further, the petroleum is distributed through the various channels, even though there are three main vectors (Schiff, & Becken, 2011). It is done through the pipeline to the storage point at Wiri, through the storage tankers at the New Zealand ports and further by road tankers. Consequently, the supply of the New Zealand petroleum as well as the distribution of the finished products is managed by the New Zealand coastal tanker fleet. Further, some of the companies that deal in petroleum trade include the BP, Shell Caltex as well as the Mobil.
2.3 The Market Structure
The expected market influence on the behavior of the constituent firms as well as guaranteeing the impact of both on the industry performance (Kelly, 2015). Further, the factors that caused the oligopolistic interdependence between the wholesalers included the few buyers, non-complex and homogeneous products, frequent buyer- seller transaction, and inelastic demand. Further, a history of cooperation amid the firms also contributed to the cause.
Consequently, the market conduct suggests that the oligopolistic interdependence amid the wholesalers will be stronger (Ranchhod, 2013). That is, the decision that is made by a single firm with respect to the price, as well as other strategic variables, must factor in the reaction of the available rivals.
Discussion
3.1 Steps For The Automible Assoociation
There is an influential support contributed by the Automobiles Association in New Zealand. It believes that the buses are affordable as compared to the train. It again indicates that the nation should prioritize the public transport expenditure (Lemon, & Miller, 2013). The plans, as well as the visions that were tested against the economic realities, meant the same. Further, it employs the promotional tools such as the road services, monitoring services, the monitoring affairs, as well as the drivers training and seminars. According to the findings observed from the entire study, it is evident that the AA should seek for concrete steps in lobbying for the better petroleum prices on the behalf of its member s...