Increase in Oil Price and Its Impact on Consumer Buying Behavior

Erum Nazir

MPRA Paper from University Library of Munich, Germany

Abstract: The continued rise of oil prices already hit many sectors and economists rightly believe that poverty has increased. The impact started coming in different forms and shapes. The first and most hits are the poor class of the country, which constitutes majority of the population. Higher oil prices mean higher food prices, higher transportation cost and higher utility bills. The research type is basically descriptive Method based on hypothesis, primary and secondary sources. In this research researcher has analyze how much each level of income affected by the rising fuel prices and its impact on consumer buying behavior. The researcher has found that people which have incomes less than 10,000Rs are so much affected by rising fuel prices they reduce their budget and control their monthly expenditure. People who have income between 11,000-30,000Rs are also much affected but not as lower level of income people are affected. The upper middle level of income i.e. Rs 31,000-50,000 is not so much affected and they will not control their expenditure on goods and their budget. The upper level of income i.e. above 51,000Rs is not affected due to the increasing fuel prices. The price of essential items continues to rise and inflation has entered double digits. Power rates as well as transportation costs are also set to rise further, making both goods and services more expensive in the short term. The common man in Pakistan is facing not only a rise in the price of fuel - be it petrol or gas, but also in the rates at which both goods and services are being sold. Soaring oil costs are already having a large impact on the Pakistani economy. Rising fuel prices, and food costs, have driven inflation to a six-year high while the current account has slumped.

Keywords: Inflation; Oil price (search for similar items in EconPapers)
JEL-codes: E3 E31 (search for similar items in EconPapers)
Date: 2006-09-30, Revised 2021-08-15
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