The document explains the concept of price mechanism in economics, specifically how buyers and sellers negotiate prices based on supply and demand. It highlights the unique nature of petroleum pricing, noting the absence of competition among suppliers and how prices often do not reflect production costs. Additionally, it discusses components and determinants influencing petrol prices in India, including the Singapore oil market and currency exchange rates.

1. PETROL
PRICE
MECHANISM
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2. Definition
of price mechanism in economics:
• Price mechanism is an economic term that
refers to the buyers and sellers who negotiate
prices of goods or services depending on
demand and supply. A price mechanism or
market-based mechanism refers to a wide
variety of ways to match up buyers and sellers
through price rationing. An example of a price
mechanism uses announced bid and ask prices.
Generally speaking, when two parties wish to
engage in a trade , the purchaser will announce
a price he is willing to pay (the bid price) and
seller will announce a price he is willing to
accept (the ask price).

3. Why is petroleum
different from other
commodities? And
why is the law of
economics turned
upside down in case
of petrol?

4. Here there is no
competition
between the
different players
Why is
petroleum
different from
other
commodities?

5. Here the price that Here there is no
we pay for petrol competition
is not related to between the
the cost of different players.
production.
Why is petroleum
different from
other
commodities?

6. Components of
petrol price in India.

7. “under-
recoveries”
Components of
petrol price in
India.

8. “under-
subsidies
recoveries”
Components of
petrol price in
India.

9. Determinants of
petrol price.

10. Singapore oil
market
Determinants of
petrol price.

11. Rupee-dollar Singapore oil
exchange rate market
Determinants of
petrol price.

12. Thank You!
Hope you had a pleasant
learning experience.
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