Canadian Wholesale and Retail Gasoline Prices - Assignment Example

The spot gasoline prices are the prices that have an influence on the wholesale of gasoline. This is the price paid by stations when filling their storage tanks. The current price of a commodity is $2.18 per gallon (Roseman n.d). This changes depending on the season. For instance, during winter the prices are likely to go down by almost a half. The specifications for the commodity have changed since 1998 (Brand n.d). This is a way of keeping up with the new technologies being invented especially in the oil production and refinery sectors. Also, the changes in the commodity specification are a method of creating environmentally friendly products thereby reducing the product's negative impacts on the environment (Roseman n.d). Sulfur levels in Canadian gasoline are not to average more than 30 parts per million. Similarly, the sale of Benzene has been limited to 1.5% by volume.

The current future of gasoline is that the prices are likely to shoot. This is because this is what has been trending from February 2015 until March 9, 2015 (Roseman n.d).  For example, the price was $2.332 on February 23, 2015, $2.473 on March 2, 2015, and $2.487 on March 9, 2015 (Brand n.d). This explains the trend that the prices are going up every week. I expect the price of gasoline to average $3/bbl. The reason for this projection is that the current futures are suggesting a very high uncertainty in the overall price outlook. For instance, the futures contracts for May 2015 averaged $52/bbl. This indicates an average of 52% volatility and 95% upper and lower limits. This confirms that the market expectations will widen over time.

In my opinion, I would recommend that the projections for the commodity be set a month before the release of the commodity. The executive committee should avoid long-duration predictions as this is affecting the price of gasoline. For example, if they predict the price shall go up even when the economy is doing great, the possibilities are that the prices will follow the projections. This has hurt many citizens who have to dig deeper in their pockets in order to pay for the required prices. Similarly, it has affected motorists who have no option but to pay the given prices. Therefore, the predictions, as well as the price setting, should not be done by just the committee. The group should keep their interests away and consider citizens who are the major beneficiaries of the product.