Fuel Price

Topics: Petroleum, Natural gas, Internal combustion engine Pages: 2 (556 words) Published: March 20, 2013
Great Impact of Rising Fuel Price
Fuel is another transportation system component. Rising of fuel price is one of the major issues facing the transportation industry in Malaysia. Fuel may be gasoline, natural gas, diesel fuel, ethanol, methanol, coal, etc. The costs and efficiency of transportation fuels are considerable interest. (Joseph Sussman; Introduction to Transportation Systems; Transportation System Components; 2000). Fuel price volatility along with overall price increases has been an issue with transportation carriers, airlines, and even some water carriers and is a continuing challenge to the financial viability, causing some carriers to file for bankruptcy. Overall, it can be argued that is a manifestation of world demand and the supply of crude oil. The demand for oil as a source of energy to power transport equipment and for private use has been growing steady, but crude oil is limited natural resource. New oil fields have been discovered since World War II, but the known available supply of oil has not kept pace with the increased demand. Consequently, the general trend for fuel prices has been upward. This trend in price has been exacerbated by the location of the best oil fields in distant countries and the disproportionate share of oil consumption. Two factors mentioned have impacted the price of oil namely the growth in demand from other countries and the speculation that occurs in the futures market. An additional factor is the disruption that can occur with terrorist actions and political upheaval in certain parts of the world. Rising fuel prices could put a spanner in the works of the region's recovering economies, Malaysia included, if the market does not cool down soon. The higher costs incurred by transportation companies are already causing jitters that they might have to offload some of the burden onto end-consumers soon. Malaysia Airlines, for example, has been lobbying for months for a domestic air fare increase to offset higher...
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