Assessment 2: individual Assignment — 40% Date Due Session 11 for FT students Last Session for PT (Blended) students Weightage 40% (80 marks) Word Limit 1500 words Citation Format References APA...

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Introduction
The prices of petrol and crude oil of domestic market has been closely linked with the
international market prices. Since Australian refining sector is mainly takes prices from the
wholesale market which decides prices on the basis of market forces of demand and supply. In
Australia, the prices of petrol are set on the basis of the Singapore benchmark petrol prices. The
wholesale market price of petrol is based on this benchmark petrol prices with additional taxes of
Australian market which makes up 95% of the total price content.
The market of petrol in Australia provides Platts the crude oil judgement basis for Dated
Brent and Tapis for the crude oil market. The spot transactions of crude oil are mainly the basis
for reporting the contractual purposes transactions in the pricing benchmark by using Dated
Brent. A shift has been found in the pricing of crude oil as mentioned by Caltex Australia. The
changes in the price of petrol towards downward side are due to rise in supply side factors which
promote the use of petrol by consumers for daily activities. These purchase and sale activities
occur in their own market of petrol and diesel which are primarily the region based markets. The
transaction linkages occur between the global supply chain markets and that of regional markets
of Australia. It balances out the supply and demand market forces on the basis of the secondary
conditions in these markets such as preferences of consumers, input prices, technological
changes, and prices of substitutes available in the market.
Impact of rise in prices of Petrol on Australian market
Usually, the market prices of petrol in regional markets are reflected through the quality
and characteristic of the local market conditions which work for the movements in the
equili
ium and quantity demanded. On the demand side, factor which affect the movement in
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equili
ium values are the civil unrest leading to fall in demand and occu
ence of hu
icanes in
the country. It increases the demand of petrol due to more transportation activities and need for
more production processes to fulfill the demand for other goods and services.
As mentioned in the article, the rise in prices of petrol by 25c per litre during the
Christmas days is quite common as there is rise in sales and demand of all the goods in the
market. The price of crude oil is attached with both the commodity market as well as money
market of the economy. There are external market environmental conditions that exist and effect
the volatile movements in the market of the petrol. It makes it quite important to recognize the
movements in the price trends of petrol on the basis of long term focus over the related market
conditions (Collier 2015).
FIGURE 1: Comparison of Singapore Petrol Price (MOPS95 Petrol) with Australian ULP TGP
NOTE: MOPS95 Petrol prices and Shipping rates are provided by S&P Global, Platts.
The benchmarks which have been set for pricing decisions of crude oil in the market if
Asia Pacific include the Dubai, Dated Brent as well as Tapis. The prices set by the Singapore
authorities of unleaded petrol makes the prices of petrol in Australian market more volatile. In
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order to meet the demand of Petrol in Australia, 20% of the total quantities used are imported
mainly from countries like South Korea and Singapore. Among these, Singapore is the largest
source of refining the petrol and distributing it to developed economies. The primary reason for
importing fuel from Singapore is the low prices as the prices of petrol in Australia are quite high
and the sales revenue would have been lower. There is some incentive for the refiners of
Australia to export the production of petrol to other countries.
Fluctuations on petrol prices near holidays
As there is no regulation over the petrol prices of wholesale refiners as well as that on
etailers of Australia, the prices of fuel is set by the various market participants and forces.
According to reports over the monitoring of petrol prices, there were evidences...