The Solution to the Pricing of Petrol for Organizations and Governments

The Solution to the Pricing of Petrol for Organizations and Governments

Greetings to you,

Has anyone heard of the Economic Principle called TANSTAAF – There Aint No Such Thing As A Free Lunch Some Is Always Paying

I am pro (for) Marketing, Digital Marketing, Strategy, Innovation and (Corporate) Entrepreneurship – those are my passions and I will be a Leader those respective fields,

I believe that if you are in the process of starting an organization or already running an organization, this post will add value to the operations of organization/s – and provide you with insights as to how petrol price increases affects you and as well as your customers,

I believe that most organizations (those that are established and yet to be established) in South Africa have this in common all of these organizations are influenced directly or indirectly when it comes to Petrol Price Increases, And most individual customers are affected by Petrol Price Increase

That concept of Over-Pricing Petrol and/or Continuously Increasing the Petrol Price’s, might work in theory, but  the pricing model of Petrol is inelastic (meaning that price increases have little or no effect on the demand levels - because individuals still need to travel to work, go shopping, and indirectly organizations need individuals  to ensure operations continue) - The Economy is made up of many different structures and balances - so focusing the energy on one aspect would then surely result in a imbalancement which would translate into the South African Economy as a whole, as the transport costs of goods would increase and then services would prices would increase as a result,

From a Marketing perspective; Distortion with the Disposable Income (Yd) of individual is not a favorable situation, as their spending power is drastically reduced, so this means your customers have less to spend on your goods and/or services, and as a result the Economy as a Whole suffers

The focus should be on Government/s negotiating the Price of Petrol with the Petroleum Suppliers based on their individual consumption behaviors per week/per month/per year - so that risk currency depreciations are reduced – and pricing stability is maintained,

Large Organizations as well could also apply the same concept mentioned above

Also if you are operating or going to operate in Johannesburg and in other areas where E – Tolling is planned there will be an impact on the Disposable Income (Yd) of your customers as well, and as result this should be planned for as well

So when you are drawing up your Financial Statements, Strategies, etc the above should be included,

   

So to Summarize;

Start Up and Small Organizations; Include the Petrol Increases in your Strategies

Medium and Large Organizations; Focus on setting up a Board that encompasses that of Large, Medium, and Smaller Organization – that negotiates the Pricing of Petrol with the Petroleum Suppliers

Governments; Purchasing Petrol based on their individual consumption behaviors

Kindest Regards

Kash