Origin of the Assignment:
This assignment is prepared with the respect to the Module of “Business Environment.” I am assigned to prepare a paper by our honorable instructors Ellie Semsar to examine the factors that influence and determine the oil price in UK oil industry. The report also aims to provide how much and to what extent, Government policies influence oil prices in UK. Objective of the Assignment:
This assignment has been prepared considering a number of objectives. The objectives are: * Identify and evaluate the factors that influence and determine the oil price in UK oil industry. * Understand how and to what extent UK government policies make an impact on the oil prices. * To show the analysis of the current oil prices and report how the trend goes. * To perform necessary analysis and present it with charts and tables from reliable sources. * To explain the factors that influence supply and demand of oil prices in UK * To show an understanding of relevant economic principles, concepts and theories * Understand and apply the main techniques of economic analysis. Sources:
Primary sources couldn’t be managed to prepare this assignment. Secondary Sources have been used to make this report. Secondary information was collected from online journal, articles and the official web sites of Nestle. Some other sources that have been used to find out the information are given on the Bibliography section.
Background of Oil industry in UK
Oil is one the most important resources in the world that controls every spheres of human lives. Especially in Developed countries, oil seems to be most needed. Crude market oil are very much needed in different operations of developed countries, with 84,249,000 barrels consumed globally each day as of 2009. (Ross Lane, 2012). Because of the oil supplies in UK, oil prices vary greatly from time to time. This assignment analyzes the current market situation for oil prices in UK. This report identifies the factors that affect supply and demand of oil prices, how government legislation affect oil price in UK. Detailed analysis of oil prices in UK over the years has been shown with proper graphs and tables. Graph of last three years’ home heating oil has been shown and the price trend has been analyzed. Also how government policy influences oil prices in UK has been analyzed. The standard economic theory of supply and demand has been related to the necessary scenario.
Analysis of the Current Prices of Oil in UK:
Oil prices in UK are in rise in January, 2013 after last 3 month of price fall. The price of oil is rising day by day. Price gap between Petrol and Diesel has widened from 5 pound to 8 pound in last four months. Diesel Price has fallen by 0.06ppl from 140.04ppl to 139.08ppl. Northern Ireland has recorded the highest unleaded oil price at 133.2ppl. Northern Ireland also recorded highest rate for Diesel at 140.6ppl in January, 2013. Yorkshire and Humberside and the northwest side have recorder their cheapest oil price 139.04ppl. The Automobile Association Limited, (2013). Home heating Oil prices trends has shown fluctuations over recent years. Below, oil prices in last 3 years and I oil prices trend from 2012 to 2013 is given:
Figure 1.1: United Kingdom Average Oil Price from 2012 to 2013. (Boiler Juice Ltd, 2013). The graph shows prices have been fluctuated up and down several times. In June, prices tend to be the lowest, 52ppl. In December price was at its peak 65ppl. Although in start of January 2013, price tend to go lower but now in February, home heating oil prices are again going up to the peak of 65ppl. To know more about the trend of the oil price fluctuation, oil price trend of last 3 years is given below:
Figure1.2: United Kingdom Average Oil Price from 2010 to 2013. (Boiler Juice Ltd, 2013). Figure 1.2 shows home heating oil prices in UK for the last three years. The graph shows that after 2010, prices has increased up to...