What Happen the Petrol Price Decrease in the Ends of 2008 and Its Effect on Consumers and Suppliers.

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  • Topic: Petroleum, Consumer price index, OPEC
  • Pages : 4 (1270 words )
  • Download(s) : 59
  • Published : February 25, 2013
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ASSIGNMENT 1

What Happen the Petrol Price Decrease in the Ends of 2008 and its Effect on Consumers and Suppliers.

Petrol is a petroleum-derived liquid mixture, primarily used as fuel in internal combustion engines. It also is used as a powerful solvent much like acetone. Petrol is very important in our life. Most current or former Commonwealth countries use the term "petrol", abbreviated from petroleum spirit. In North America, the word "gasoline" is the common term, where it is often shortened in colloquial usage to simply "gas".

In the early of 2008, the Malaysia’s government was enouncement that the petrol price was raised 78sen from RM1.92 to RM2.70 per liter. But towards the end of 2008, the petrol price was decrease about 60% to RM1.80 per liter. The petrol price drops actually the economic recessions and depressions caused by expensive fuel that cannot be had at any price. Some in the Peak Oil culture expected suburbia to be abandoned as people cannot afford a commuter lifestyle anymore.

First and foremost, the inflation of the world’s economics causes the petrol price decrease. The weakened dollar, one of the reasons Americans can't spend as much, has been blamed for much of crude's run up. Investors have been buying oil and other commodities to hedge against inflation, but that behavior may be changing as many begin to see it weighing on demand.

Next, the Federal Reserve, which has the power to quell runaway inflation by raising a key inter bank lending rate, has its hands tied, since the banks and other institutions that prop up the U.S. economy need the liquidity. In recent days, the government has unveiled a plan to bolster mortgage financing companies Fannie Mae and Freddie Mac, and has taken control of mortgage lender Indy Mac Bank. Internationally, the Organization of Petroleum Exporting Countries mirrored concerns. The oil cartel lowered its demand forecast for 2008 to an increase of 1.2% from 1.28%,...
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