ECONOMICS

SCHOOL BASED ASSESSMENT

Title: An investigation into the impact of increasing petrol prices on the

residents of Barbican during the period July to November 2022

Candidate Names Candidate Numbers

Samuels, Samantha 1000161827

Wedderburn, David 1000161851

White, Rihanna 1000161860

School: Campion College

Centre Number: 100016

Year of Examination: 2023

Teacher: Miss Morris

Territory: Jamaica
 TABLE OF CONTENTS
Page Number

Acknowledgement 2
Objectives 2
Introduction 2
Methodology 3
Limitations Faced 3
Presentation and Explanation of Data 4
Analysis of Data 12
Findings 14
Conclusion 14
Recommendations 14
Bibliography 16
Appendix 17

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Acknowledgement

We would like to thank our teacher for guiding us through the project and our family for
giving us useful advice. We would also like to express gratitude to our respondents as their
answers were crucial in carrying out this research.

Objectives

● To investigate the effect of the increase in gas prices on the residents of

Barbican
● To determine the cause of the increase in price
● To determine methods used by the residents to adapt to the new prices.
● To investigate how gas prices change the amount of gas bought.

Introduction

The Petroleum industry is essential for the functioning of our country. Petroleum
mining began in Jamaica in 1964 when a private company, ESSO, constructed the island's
first petroleum refinery. It was later sold to the Jamaican Government and was renamed
"PetroJam Limited". Within the past 10 years the price of gas has increased by over 100%,
with the current price of gas being $185 per litre for 87, $189 per litre for 90 and $228 per
litre for diesel as of Nov 6,2022, according to: Prices Archive. (2022). Petrojam Limited.
https://www.petrojam.com/price/
This research will help the members of the SBA group become more cognizant of the
factors involved in petroleum firms meeting the demands of consumers in Jamaica, as well
as foster a deep appreciation for the importance of the industry in our island. Additionally,
this research will help the members develop skills essential for the analysis of economic
problems.
This research will also provide information reflecting the views of the Jamaican residents
therefore being beneficial in making decisions necessary for growth in our society.

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Methodology

The research data in this SBA was accumulated through primary sources, including
questionnaires and secondary sources, which consisted of newspaper articles and webpages.
Firstly, thirty questionnaires were handed out to the residents of Barbican. The results were
calculated and tallied to output the charts below. The questionnaires were handed out at
random. Secondly, the internet was used to research changes in gas prices in Barbican. Lastly,
newspaper articles, such as “Gas prices down $0.25, diesel up $3.00.” The Gleaner, 20 July
2022 and “Gas prices down $4.50, diesel down $4.50.”, The Gleaner 31 August 2022, were
collected and reviewed to get first-hand knowledge of the increasing petrol prices over the
period under review.

Limitations Faced

● No deadline was given to respondents, so the questionnaires took some time to

collect.
● Some participants may have misinterpreted the questions asked.
● Despite trying to make gas price the only factor in the questionnaire, outside factors
outside of our control affected the responses of a few participants.

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Presentation and Explanation of Data

The following is the presentation of data collected.

Question 1

Of the 40 respondents, 35% (14) were female and 65% (26) were male. Modal gender is
male.

Question 2

Figure 1.0
42.5% of the respondents fell within the age range of 31 to 45 years old, 35% were within the
range 18 to 30 years old, 20% were 46 to 59 years and 2.5% were 60 and older. Modal age
range is 31 to 45 years old.

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Question 3

Figure 1.1
42.5% of the respondents have one or two dependents, 32.5% have 3 to 4 dependents, 17.5%
have no respondents and 7.5% have 5 dependents or more.

Question 4

Figure 1.2

Of all the respondents, more than half of them drove cars as their primary vehicle. It can
therefore be said that most respondents drove cars. SUV vehicles were the second most
popular vehicle. Vans were the least popular vehicle with 5% of the respondents using vans as
their vehicle. Cars were the modal vehicle type.

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Question 5

Figure 1.3
Of all the respondents, 85% of them usually purchase gasoline 90, making it the most popular
choice. Diesel is bought by 10% of the respondents. Gasoline 87 is usually bought by 5% of
the participants, making it the least popular.

Question 6

Figure 1.4
47.5% of the respondents buy petrol 2 to 4 times a week, while 45% only buy it once a week.
7.5% of the respondents buy petrol everyday.

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Question 7, 8 and 9

Figure 1.5

Figure 1.6

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Figure 1.7
Majority of the respondents have been affected by the gas price changes in the past 5 years.
Of those affected, 67.7% of them have bought less petrol while 32.3% bought more. 80.6% of
respondents state that their reason for the change in the amount of petrol purchase was that
the gas prices were too costly, 2.8% state that they travel shorter distances now and 16.7%
state that they were not affected by the raise in prices.

Question 10

Figure 1.8
Of the respondents, 85% use their vehicle everyday while 15% use theirs 2 to 4 times a week.

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Question 11

Figure 1.9
Of the respondents, 80% stated that they used their vehicle everyday a year ago, 5% used it
once a week and 15% used their vehicle 2 to 4 times a week a year ago.

Question 12

Figure 2.0
65% of the respondents have not had a change in the amount of times they carpooled. 32.5%
state that this occurrence increased and 2.5% state that they have carpooled less.

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Question 13

Figure 2.1
15% of the respondents have taken public transport more frequently since the increase of gas
prices. 82.5% have not had a change in the number of times they have taken public transport
while 2.5% stated that it has decreased.

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Question 14

Figure 2.2
Last year, 42.5% of the respondents went out for leisure once a month while 22.5% went out
2 to 4 times a week. 17.5% went out twice a week and the rest went out once a week.

Question 15

Figure 2.3

Of the 40 respondents, 45% stated that due to the increase in gas prices, the frequency they
chose in the previous question was decreased and 7.5% stated that it was increased. 47.5%
state that the gas prices did not affect their previous answer.

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Analysis of Data

Forty car owners were given questionnaires. There were 14 females and 26 males. Fourteen
were from the age group 18-30 years, seventeen from the age group 31-45 years and eight
were 46-59 years and only one participant was over 59 years old. Additionally, of the 40
participants, 19% had zero dependents, 43% had 1-2 dependents, 32% had 3-4 dependents
while only 7% of participants had 5 or more. The mean of the number of dependents was
2.15 dependents. This may be a significant factor in the results as the amount of dependents is
usually directly proportional to the amount of gas bought due to the increased usage of the
vehicle.

45% of participants bought petrol once a week, 48% bought petrol 2-4 times per week while
7% participants bought petrol everyday. A staggering 77% of participants believe the change
in gas prices over the past 5 years affected the frequency of petrol purchase while 23% of
vehicle owners believed otherwise. The mode was 2-4 times per week, the median was also
found to be 2-4 times per week.

Approximately 70% of participants that believe that the change in gas prices affected the
frequency of petrol purchase, state that the increase in price has decreased their consumption
of petrol. This can be attributed to the Law of Demand. When the price of a good or service
goes up, the quantity demanded goes down. As shown on FIgure 2.4 below, as price increases
from P2 to P1, the Quantity demanded decreases from Q2 to Q1.

Quantity demanded

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Figure 2.4
Furthermore 80% of vehicle owners surveyed believe that gas prices have become too costly
further cementing the reason for the fall in Quantity demanded is due to the increase in price.
17% participants were not affected by this increase in price which can be attributed to lack of
consumption of gas on a regular basis or external factors such as affluence. 3% of the
participants believed that their consumption has decreased solely due to the fact that
travelling shorter distances decreases the amount of gas used.

85% of participants use their vehicle everyday while 15% participants use their vehicle 2-4
times a week. This number remained nearly identical when compared to how often the
participants used their vehicles last year. 83% of participants use their vehicle everyday while
15% use their vehicle 2-4 times a week, however 3% used their vehicle only once a week in
2021 which was likely caused by external factors.

Since the increase of petrol prices, the number of participants utilising carpooling remained
constant for 65% of the 40 participants, while it has increased for 33% participants and
decreased for 2%. Similarly, since the increase of petrol prices, the number of participants
who take public transport has remained the same for 82% participants while it has increased
for 15% of participants. Consumption of public transport decreased for 3% of participants,
however, this was caused by external factors such as declining health as age increased. This
can be attributed to cross elasticity of demand (XED) which measures the responsiveness of
the quantity demanded of one product to the change in price of another product.

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As the price for gas increased the quantity demanded of substitutes (carpooling and public
transport) increased.
The frequency that participants went out for leisure last year (with their own vehicle) was
once a month for 17 participants, 2-4 times for 9 participants, twice a week for 7 participants
and also once a week for 7 participants. The increase in gas prices did not affect how often 19
participants went out for leisure; however , it decreased how much 18 participants went out
for leisure. This is also an effect of the law of demand that states as price increases quantity
demanded will decrease. Surprisingly, three participants saw an increase in the number of
times they went out for leisure which was most likely caused by an outside factor.

Findings

The Findings of the study are:

1. There is an inverse relationship between price and quantity demanded,with quantity
demanded decreasing as the price of petrol increased. This is the First Law of
Demand in action.
2. For some individuals, there was high cross elasticity. As the cost of petrol increased,
the quantity demanded of substitutes (carpooling) increased.

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Conclusion

In completion of this School Based Assessment, it can confidently be said that the objectives
were met. In the community of Barbican, the majority of residents have been significantly
impacted by the increase in petrol, with most residents decreasing the frequency at which
they purchase petrol. Evidence of this is seen as the frequency at which petrol is purchased
has decreased for over half of the respondents. Additionally, some residents opted to increase
carpooling in order to adapt to the skyrocketing gas prices.

Recommendations

From the findings of the questionnaire, it is abundantly clear that the residents of Barbican
have been affected in some way by the steady increase in petroleum prices.

The following are recommendations which may cushion the impact of the rising prices.

1. Reduction in sales tax of gasoline. The government could implement days where the
tax on gas is temporarily removed or lowered. This will help ease the burden of
increasing gas prices and increase the quantity demanded as more consumers will now
be able to willing and able to purchase sufficient gas.

2. The government can create application software which shows Jamaicans, all the
possible gas stations close to their location along with their prices. This will help to
increase consumers' knowledge of the prices in the market and thus help them to
make a cost-effective decision.

3. The government can lower or remove tax on substitutes such as electric cars. If the
prices of a substitute decrease, the quantity of petrol demanded will decrease as the
demand for the substitute increases. The price of petrol may eventually fall as there is
no longer the high level of demand as before

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 Bibliography

‌Dransfield, R. (2014). Economics for CSEC. Oxford University Press, USA.

Gas prices up $0.25, diesel by $3.96. (2022, November 2). Jamaica-Gleaner.com.

https://jamaica-gleaner.com/article/news/20221102/gas-prices-

025-diesel-396

Gopie, P. (2010). Economics for CSEC examinations. Macmillan Education.

Greenwood, R. (2007). Economics for CSEC. Cambridge University Press.

Prices Archive. (n.d.). Petrojam Limited. https://www.petrojam.com/price/

Jamaica Gleaner (jamaica-gleaner.com)

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Appendix

Questionnaire
Good Day, we are a group of fifth form CSEC Economics students carrying out our SBA on
the effects of rising petrol prices on Jamaican residents. We are kindly asking that you
complete this short questionnaire. Your responses will be kept confidential. Thank you.

1. What is your gender?

Female
Male

2. In which age range do you fall?

18-30
31-45
45-59
60+

3. Number of dependents (including spouse)

0
1-2
3-4
5+

4. What kind of vehicle do you drive?

SUV
Car
Truck
Van

5. What type of petrol do you usually purchase?

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 87
90
Diesel
6. How frequently do you purchase petrol?
Everyday
2-4 times per week
Once a week

7. Has the change in gas prices over the past 5 years affected the frequency of petrol
purchases?
Yes
No

8. If yes, how has it affected the number of petrol purchases

Increased
Decreased

9. Select the reason for your answer.

Gas prices are too costly
I am not significantly affected by the rise in petrol prices

10. How often do you use your vehicle?

Everyday
2-4 times a week
Once a week
Other

11. How often did you use your vehicle a year ago?
Everyday
2-4 times a week
Once a week
Other

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12. Since the increase of petrol prices, has the number of times you carpool changed?
Yes, it has increased
Yes, it has decreased
No, it has remained constant

13. Since the increase of petrol prices, has the number of times you take public transport
changed?
Yes, it has increased
Yes, it has decreased
No, it has remained constant

14. How frequently did you go out for leisure last year (with your own vehicle)?
Twice a week
Once a week
2-4 times a month
Once a month

15. How has the recent increase in gas prices affected the frequency you chose in the
question above?
It decreased it
It increased it
It did not affect it

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