MARKETING RESEARCH

ASSIGNMENT: 1

SYNOPSIS ON RISING FUEL PRICES AND ITS

IMPACT ON INDIAN ECONOMY AND MIDDLE
INCOME CLASS OF PUNE

Submitted To:
Prof. Sanjay Bhale
Faculty: Symbiosis Institute of Business Management

Submitted By
Kumud Ranjan (33267)
Kunal Saha (33274)
Rishi Raj More (33266)
Marketing ‘B’
IIND Semester
Symbiosis Institute of Business Management

Date: 05/01/2011
Table of Contents
1. INTRODUCTION TO FUEL PRICES IN INDIA.......................................................................................- 3 -
2. EFFECTS OF RISING FUEL PRICES IN INDIA.......................................................................................- 4 -
3. RESEARCH OBJECTIVE......................................................................................................................- 5 -
4. RESEARCH QUESTION......................................................................................................................- 5 -
5. RESEARCH DESIGN...........................................................................................................................- 5 -
a. RESEARCH METHEDOLOGY..........................................................................................................- 5 -
b. RESEARCH SCOPE........................................................................................................................- 5 -
c. DATA COLLECTION TECHNIQUES.................................................................................................- 5 -
d. TARGET AND SAMPLE SELECTION................................................................................................- 5 -
e. DATA HANDLING.........................................................................................................................- 6 -

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1. INTRODUCTION TO FUEL PRICES IN INDIA
The Empowered group of Ministers under the leadership and upon the recommendations of Dr.
Kirith Parikh(Adviser – Finance Ministry), the finance minister Mr. Pranab Mukherjee, along
with the support from the party and the parliament took a decision to deregulate the prices of
petrol on June 25, 2010. The government is also expected to deregulate the subsidy on diesel,
and cooking liquefied petroleum gas (LPG), which is a matter of concern, as it will create extra
burden on the Indian public, which have already been affected by the double digits of inflation.

The major reasons that initiated the government to revise the prices of petrol were as follows:

a) Rise in International Crude Prices: The crude oil prices during 2003 were around $28 per
barrel which rose to $147 per barrel in 2008 and saw huge fluctuation from there on. The
rising piece in international arena and constant price in the domestic market were causing
stare firms and private firms a huge loss, which required a price revision in the economy.
b) Losses of State Firms: Most of the fuel industry (basically government owned) were
selling petroleum products at a price lower than their costs, which accumulated to a loss of
Rs. 72,000 Crores, which was an important point on revising and de-regulating the prices
of petrol in India.
c) Encourage Private Player Participation: The rise and decontrol of petrol prices would
encourage private sector participation, and this would enhance the overall supply of
petroleum prices, all across India and would initiate competition and make it available at an
affordable rate to the people of India.
d) Encourage Optimal Fuel Consumption: The rising price of petroleum products will make
it expensive for the Indian household to afford it in a desired manner, and it will promote
fuel conservation and encourage the consumers to adopt fuel efficiency practices.

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2. EFFECTS OF RISING FUEL PRICES IN INDIA
The effects of rising fuel process in India can b judged by the help of following points:

a) Increase Inflation: The rise in fuel prices will increase the transportation costs and the
costs of the related goods, which are used as in manufacturing processes such as fuel and
power, which will create further inflation in the economy and affect every sections of the
society, mainly the lower and middle income class of the society.
b) Higher Interest Rate: The rising rate of inflation will also increase the cost, of fund in the
economy, which will make the loan dearer for the company, and further increase the cost of
goods or services owing to the higher costs of capital.
c) Reduce Budget Deficit:  The deregulation of prices, have lead to the market driven prices,
which thus prevents the government to stop the subsidies and other related benefits
associated with the price of petrol. These reductions in benefits of prices have freed up the
government amount and lead the government to use these funds in different infrastructural
projects and upliftment of the economy and ultimately leading to reduction in the fiscal
deficit of the government.
d) Increase Margin of Oil Companies: Deregulation will help public sector oil companies
provide product as per market level prices and compensate their losses. 
e) Good quality of oil and variety: Deregulation of fuel prices will invite private player
participation and lead to good quality fuels and variety of fuels due to increase competition.
f) India Bandh and Political Pressure: The day when the government announce de-regulation
on the price of Petrol, it have to face heavy criticism and protests from the opposing parties
and the next day was called as “Bharat Bandh” by the opposition parties in protest of the
decision made by the government, which would raise the prices of petroleum products and
the average Indian citizens would be affected by this.

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3. RESEARCH OBJECTIVE
The objective of the research will be to find out the impact that have been created on the
middle income class people of Pune region due to the rise in prices of petrol by the
government. The research will provide us with an opportunity to learn the insights about the
effect of the rising prices and its effects on standard of living and livelihood of average Indian
consumers.

4. RESEARCH QUESTION
The question for our research that we will aim at fulfilling will be “How has rise in prices of
petroleum products affected your standard of living”? This question will help us to
understand the views regarding the problems or difficulties faced by them due to the rising
prices of petroleum products.

5. RESEARCH DESIGN

a. RESEARCH METHEDOLOGY
In the research we are trying to find out the cause and effects of rising petroleum prices and its
impact on the middle income class people of Pune. Therefore for this research ‘Causal
Research’ will me more appropriate as it will help us to analyze the cause and effects of rising
prices and its impact on the people of Pune.

b. RESEARCH SCOPE
The research will be carried out purely for academic purpose to understand the impact of rising
petroleum prices on the middle income class people of Pune. The findings of the research will
be used for classroom discussions and not quoted or used outside in the public domain.

c. DATA COLLECTION TECHNIQUES

The research will use questionnaire form of data collections to understand the impact of rising prices on
its target audience as mentioned above. With the help of questionnaire, the research will try to establish
the relationships between their income levels, consumptions on petroleum products and the overall
effects on their standard of livings due to the rising prices of petroleum products.

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d. TARGET AND SAMPLE SELECTION
The target audience for carrying out the research successfully will be as follows:

 Housewives
 Job Holders and Professionals
 Small Traders and Shops
 College and Schools going students
 Cab and Transportation services providers

The Pune city have maximum middle class populations of schools and college going students
so maximum sample will constitute of these group, followed by cab and transportation service
providers, housewife’s and finally job holders and small traders. The weights allocated to each
target audience are as follows:

WEIGHTS
S.NO TARGET AUDIENCE ALLOTED
1 SCHOOL AND COLLEGE GOING STUDENTS 0.40
2 CAB AND TRANSPORT SERVICE PROVIDERS 0.25
3 HOUSEWIVES 0.25
4 JOB HOLDERS AND PROFESSIONALS 0.05
5 SMALL TRADERS AND SHOPS 0.05

e. DATA HANDLING
Once the questionnaire is completed and information is collected, appropriate statistical
programs and tools mainly Microsoft Excel and Minitab will be used to analyze the data and
reach logical conclusions from the information collected. The use of Excel and Minitab will
help us to cluster and analyze the data, and also helps with pictorial representation of analysis
which will make it easier for us to understand the nature and logic behind the data.

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