Transport Phenomena: An Analysis of Fuel Prices and Economic Effects

This report delves into the complexities of fuel price fluctuations, examining the economic factors that drive these changes and their subsequent impact on consumers. The analysis explores the two main motives for increasing fuel prices, including the interplay of global demand, exploration, and refinery capacity, as well as disruptions to the supply chain. The report also considers the regressive impact of rising fuel costs on low-income families, particularly in the context of New Zealand. Furthermore, it discusses various policy approaches to address fuel price issues, weighing the benefits and drawbacks of different strategies. The report references relevant academic papers and research studies to support its findings, providing a comprehensive overview of the economic challenges and consumer implications associated with fuel price volatility.

Running head: Transport Phenomena 1
Title
Name
Date

Running head: Transport Phenomena 2
Abstract
Fuel charges have gradually amplified in current years and are like to stay high in
upcoming years. Fuel charges are an emotive issue. There stand regular demands for inquiries
into fuel price scoring, and many movements to promote low cost oil through public strategies
and buyers’ boycotts. As a result consumers and policy creators are wondering how best to
answer to increasing fuel price. Which rules are considered ideal depends on how the problem is
solved. If the only thought is consumers’ unaffordability then price minimization may seem
sensible, but considering other impacts, such rules are undesirable because they execute costs
elsewhere in the budget and increase fuel price to impairs other economic, social and
environmental problems.
There two main motives for increasing fuel prices. The first is that the sphere demands
for fuel, fuel is above exploration and refinery capacity. When resource is fitted, disruptions or
the ordinary threat of disruption to lubricant well or refinery capacity such as war or a natural
disaster can cause charge to spike. (Gatzweiler, F 2016)Oil increase in New Zealand government
might be regressive on the other hand, for instance low income families’ inefficient cars and
must get to work and they spend high part of their earnings on fuel. (Gatzweiler, F 2016)
Conclusion
Economist incline to think of fuel levy as the greatest way of reaching an approached mix of all
sub goals because it allows the arcade to find the smallest cost incentive well-suited
combination, but fuel price is supposed to be fair to all, the inflations should not affect the
consumers. (Kalkuhl, M 2016)

Running head: Transport Phenomena 3
References
Gatzweiler, F. W., & Von, B. J. (2016). Technological and institutional innovations for
marginalized smallholders in agricultural development.
Kalkuhl, M., Von, B. J., & Torero, M. (2016). Food Price Volatility and Its Implications for
Food Security and Policy. New York: Springer.

Running head: Transport Phenomena 4
Research papers
Adachi, T. and Matsushima N. (2014) The Welfare Effects of Third-Degree Price
Discrimination in a Differentiated Oligopoly: 52(3), 1231-1244, Economic Inquiry.
Allaz, B. and Vila J. (1993), Competition, Forward Markets and Efficiency: (59) 1-16,
Barron, J., Taylor, B. and Umbeck J. (2001) New Evidence on Price Discrimination and
Retail Configuration: (8) 135-139 Applied Economic Letters.
Burke, P. & Nishitateno, S. (2013). Gasoline prices, gasoline consumption, and new
vehicle fuel economy: (36) 363– 370 Evidence for a large sample of countries. Energy
Economics
Burke, P. (2014). Green pricing in the Asia Pacific: 1(3), 561–575. Asia & the Pacific
Policy Studies.
Eckert, A., (2013) Empirical Studies of Gasoline Retailing: 27(1), 140-166,
Evans, L. and R. Meade, 2005, Alternating Currents or Counter-Revolution: (23) 47-56,
Victoria University Press
Grabowski, D. & Morrissey, M. (2006). Do higher gasoline taxes save lives? (90) 51–55,
Economic Letters

Running head: Transport Phenomena 5
Houde, J, (2012) Spatial Differentiation and Vertical Mergers in Retail Markets for
Gasoline: 102(5), 2147-2188. America Economy Review.
Journal of Economic Surveys.
Journal of Economic Theory
Kennedy, D. and Wallis, I. (2007) Impacts of Fuel Price Changes on New Zealand
Transport: (331) 56-76 New Zealand Research Report.
Mankiw, N. and M. Whinston (1986) Free Entry and Social Inefficiency: 7(1), 48-58,
Rand Journal of Economics.
Morgan A. (2017). New Zealand consumer confidence: (34) 4-6. New Zealand consumer
confidence http://www.roymorgan.com/morganpoll/consumerconfidence/anz-roy-morgan-
new-zealand-consumer-confidence.
Nishitateno, S. (2015). Gasoline prices and road fatalities: 53(3), 1437–1450. International
evidence
Quddus, M., Huang, A. & Levinson, D. (2013). Gasoline price effects on traffic safety in
urban and rural areas: (59) 154–162, Safety Science.
Rossini, G. and Vergari, N (2011) Input Production Joint Venture: 11(1), 1935-1704. The
B.E. Journal of Theoretical Economics.