THE IMPACT OF OIL PRICE

HIKE TO THE TRICYCLE

DRIVERS ORMOC CITY

-Presented by: Group 1 Researchers

St. Genevieve
Chapter I

INTRODUCTION

 The oil price impact is in particular influential in determining the economies

of emerging countries as these economies are not financially stable and are
weak to the influences of external shocks.
 One of the main impacts from oil price changes is on inflation rate/ changes
on prices.
 Fluctuation in inflation or price levels may further lead to economic changes which will affect
the economic performance in overall.
 The oil price increase recorded between 2003 and July 2008 has reflected the boosting of
demand from fast-growing economies like China and India, as well as supply shortages
originating from geopolitical tensions and short-term market speculative movements.
 The reduction of oil production from Organization for Economic Co-operation Development
countries, associated with political instability in the Gulf Region, Nigeria, and Venezuela have
contributed to higher oil prices too.
 Major oil exporting countries have experienced strong economic growth, and at the same time
they have subsidize their local oil demand to such an extent that the available oil exported to
the world market has been reduced by the growth of domestic demand.
 Due to the increasing of oil price hike in Ormoc, City this study aims to investigate if oil price
hike has an impact to the income of tricycle drivers and this study is important due to the fact
that it will provide some insight about the ability of tricycle drivers to survive under rising fuel
costs.
Statement of the Problem

Transportation is an important sector of the economy. Gasoline is getting

more expensive and will affect to the drivers. This study was conducted to
determine the impact of oil price hike to the income of tricycle drivers in Ormoc
City.

1.What are the effects to the daily income of tricycle drivers?

2.How do they divide their needs between filling up on gas and other needs?
3.Is their income enough to sustain their daily needs?
Hypothesis of the Study

Based on the research problem stated above, the research hypothesis was tested. There is a
significant impact of oil price hike to the income of tricycle drivers in Ormoc City.
Importance of the Study

The findings and results of this research about the impact of oil price hike
to the income of tricycle drivers in Ormoc City will be beneficial to the following:

 Gasoline Stations. They will have information about how the price at the
pump also reflects local market conditions and factors, such as the fueling
location and the marketing strategy of the owner. The cost of doing business
by individual gasoline retailers can vary greatly depending on where a
gasoline fueling station is located. These costs include wages and salaries,
benefits, equipment, lease or rent payments, insurance, overhead, and state
and local fees.
 Community. The benefit of performing this research will help people in the community to have
the ability to appraise on how does oil price hike affect the income of tricycle drivers, not just
for the tricycle drivers but for each and everyone that uses gas everyday. It is also important for
every family in the community to be aware if oil price hike gives an impact to the income of
tricycle drivers, for them to have an idea on what will they do or not to do.
 Drivers. This study aims to help the drivers what is the impact of oil price hike to their daily
income and how to balance their daily needs.
 Future Researchers. This study will serve as their insight reference and will give them ideas as
insights if they will having research with same topic.
Scope and Limitation of the Study

This study was conducted in Ormoc City, Leyte. The respondents of this study were the selected
tricycle drivers. This study started during the year 2022-2023.

Definition of Terms

Oil Price Hike. Refers to the rising price of oil.

Phenomena. Refers to a fact or situation that is observed to exist or happen, especially one whose cause
or is in question.
 Economy. Refers to a system of organizations and institutions that either facilitate or play a role in the
production and distribution of goods and services in a society.
 External Shock. Refers to an unexpected event that dramatically changes an entire economy’s
direction, either upward (value gains and job creation) or downward (value lost and job destruction).
 Inflation. Refers to the rate of increase in prices over a given period of time.
 Fluctuation. Refers to an irregular rising and falling in number or amount; a variation.
Conceptual Framework

 The conceptual framework of this study aims to explore the relationship between the
independent variable, oil price hike, and the dependent variable, the income of tricycle
drivers. Additionally, the framework considers the potential moderating effect of commuters
and the mediating role of driving hours.
 The independent variable, oil price hike, represents the fluctuations in oil prices over time. As
oil prices increase, tricycle drivers face rising operating costs, particularly in relation to fuel
expenses.
 These increased costs can directly impact their income, potentially leading to financial
challenges and reduced earnings. The dependent variable, the income of tricycle drivers,
serves as the indicator of their financial stability and well-being. This variable encompasses
the total earnings derived from tricycle services, including fares and other income sources.
 The framework incorporates the moderating effect of commuters, who represent the
passengers utilizing tricycle services. Commuters may play a role in influencing the income of
tricycle drivers. Factors such as changes in demand, passenger preferences, and willingness to
pay higher fares during oil price hikes can influence the earnings potential of tricycle drivers.
 Furthermore, the framework considers driving hours as the mediating variable.
 Driving hours reflect the amount of time tricycle drivers spend operating their vehicles. Longer
driving hours may be a result of various factors, including increased demand during oil price
hikes, the need to compensate for higher operating costs, and efforts to maximize income.
 The mediation of driving hours suggests that the relationship between oil price hike and income
may be influenced by the amount of time tricycle drivers spend on the road.
 By examining the interplay between the independent variable (oil price hike), the dependent
variable (income of tricycle drivers), the moderator (commuters), and the mediator (driving
hours), this conceptual framework provides a comprehensive understanding of the complex
dynamics at play in the context of tricycle transportation.
 It serves as a guide for the subsequent data collection, analysis, and interpretation, enabling a
deeper exploration of the relationships between these variables and their implications for the
income of tricycle drivers.
Conceptual Framework
CHAPTER II
REVIEW OF RELATED LITERATURE

This chapter shows the review of related literature that is essential for the study. The study focused about the
oil price hike that affects to the income of tricycle drivers.

• Over the past two years, oil prices have increased very sharply, with the Fund’s reference price rising from a 25 year
low of $11 per barrel in February 1999 to a peak of close to $35 per barrel in the first week of September 2000.
• After easing somewhat in early October, oil prices increased again in late October and November to an average of
about $32 per barrel. At the same time, futures markets indicated that average oil prices in 2001 would be about $5
per barrel higher than projected in the most recent World Economic Outlook (WEO) published in late September.
• The recent World Economic Outlook contained an extensive discussion of the potential impact of higher prices. The
pose of this paper is to expand on that discussion in the light of developments since then.
• The paper reviews the causes underlying the recent oil price increase and the outlook for 200, discusses the
potential impact of a sustained $5 per barrel increase in the price of oil on the global economy, focusing on the key
channels through which it operates, and the effects of differing policy responses.
 In October and November, 2000 the world oil price averaged over three times higher than its
February 1999 low, and, excluding the Gulf war period, reached a 15 year high in both real and
nominal terms. In the mid-1990s, as the pace of economic expansion picked up so did world
demand in general for energy and for oil in particular.
 The effect on oil prices was muted as oil production largely kept pace with the increase in oil
consumption. With the onset of the Asian crisis in 1997, as well as subdued activity in Japan and
Europe, global consumption of oil fell significantly short of production and the Fund’s indicator
price for oil fell progressively from about $20 a barrel in early 1997 to below $11 in February 1999.
 The Organization of Petroleum Exporting Countries (OPEC) met on several occasions in 1998 and
concluded agreements to restrain production. The upward trend in production was reversed, but
compliance with the agreements was not sufficient to prevent price declines.
 In early 1999, however, OPEC’s production restraints were reinforced by parallel agreements with
some other oil exporting countries (most notably Mexico and Norway) which enabled oil production
to be reduced more effectively from the second quarter of 1999 onwards.
CHAPTER III

METHODOLOGY

This chapter describes the design, methods, instrumentation, and procedures used in the
conduct of this study. It includes the research design, research environment, research
respondents, data gathering procedures and the statistical treatment of data used for this study.

Research Design
This study adhere the quantitative approach, using the descriptive survey design to
associate the impact of oil price hike to the income of tricycle drivers in Ormoc City. Since it
was quantitative approach, the subject matter itself determines the variables and not the
researchers. This research design generally uses survey questionnaires to collect data for the
objective of determining the impact of oil price hike to the income of tricycle drivers in Ormoc
City.
Research Environment

This research study was conducted in terminal of Ormoc City, province of Leyte. The figure 2
shows the location of terminal.

Research Subjects/Respondents

The respondents of this research study were the tricycle drivers in Ormoc City. The researchers
used voluntary sampling design to be used. In this sampling design, the respondents were willing to
answer the questionnaire given by the researchers.
Research Instruments and Data Gathering Procedure

The researchers utilized a survey questionnaire as their primary data gathering instrument.
This research instrument was designed to collect information regarding the demographic profile of
the respondents. Prior to conducting the survey, the researchers sought permission to approach the
tricycle drivers as participants. Once permission was granted, the questionnaires were distributed
to the drivers. After completion of the questionnaires, the researchers collected and retrieved
them. The gathered data was then compiled, tabulated, and subjected to statistical analysis.
Statistical Treatment of Data

The researchers collected data and organized it through tallying, tabulating, and applying
statistical methods to facilitate its management and interpretation for hypothesis testing. In this
study the following statistical measures were employed.
Frequency and Percentages. This was used to measure the distribution of the demographic
profile of the tricycle drivers and the impact of their income when the oil price increases.
 P= F/N(100)

Where:
P = percentage
F = frequency of each category
N = total number of respondents
100 = constant multiplier
CHAPTER IV

ANALYSIS, PRESENTATION, AND INTERPRETATION OF DATA

In the present study, tables were employed to systematically analyze and

document the outcomes of the observation. To ensure comprehensive data
collection, the researchers administered survey questionnaires to a sample of 40
tricycle drivers in Ormoc City. The primary objective of this data gathering was
to obtain valuable insights regarding the implications of oil price hikes on their
income levels. Each questionnaire item was accompanied by a well-structured
table presentation, which effectively facilitated data visualization and aided in
the conclusive analysis of the study findings.
 Table 1
Profile of Tricycle Drivers According to Age

Age Frequency Percentage Distribution

18-25 1 2.5%

26-35 9 22.5%

36-45 13 32.5%

46 above 17 42.5%

Total 40 100%

Based on the table above, with all the 40 respondents, 18-25 years old has a
frequency of 1 with an equivalent of 2.5%, 26-35 years old has a frequency of 9 with an
equivalent of 22.5% while 36-45 years old has a frequency of 13 with an equivalent of 32.5%
and 46 years old above has a frequency of 17 with an equivalent of 42.5%. It therefore
shows that the tricycle drivers 46 above of age has a higher frequency.
 Number of Hours Table 2
Frequency Percentage Distribution

What is the10average
hours number of hours 7you work per day as a tricycle
17.5% driver?

13 hours 18 45%

11 hours 10 25%

15 hours 5 12.5%

Total 40 100%

As shown in table 2, out of 40 respondents, 7 (17.5%) were work 10 hours per day, 18 (45%)
were work 13 hours while 10 (25%) were work 11 hours and 5 (12.5%) were work 15 hours per day.
This table reveals that the majority of working hours per day were the 13 hours followed by 11
hours and next were the 10 hours and lastly were the 15 hours.
 Table 3
How often do you experience oil price hikes affecting your affecting the cost of fuel?

Often experience Frequency Percentage Distribution

Very frequently 11 27.5%

Frequently 24 60%

Occasionally 5 12.5%

Rarely 0 0%

Total 40 100%

Table 3 indicates that 60% of the total respondents are experiencing frequently of the oil
price hikes affects the cost of fuel and 27.5% are experiencing very frequently. Whereas
occasionally has 12.5% and rarely has 0%.
 Table 4
In your opinion, how have oil price hike affected your income as tricycle driver?

Affect the income Frequency Percentage Distribution

Significant decrease 27 67.5%

Slight decrease 13 32.5%

No significant impact 0 0%

Significant increase 0 0%

Total 40 100%

Table 4 indicates that 67.5% of the total respondents are having a significant decrease to
their income and 32.5% are having slight decrease. Whereas no significant impact has 0% and
significant increase has 0%.
It therefore shows that that the majority were the significant decrease and it represents that
oil price hike has an impact to their income.
 Table 5
Do you find it challenging to cover your operating costs(including fuel expenses and other
expenses) during periods of oil price hikes?

Challenging to cover operating Frequency Percentage Distribution

costs

Yes very challenging 33 82.5%

Somewhat Challenging 7 17.5%

Not Challenging 0 0%

Total 40 100%

As shown in table 5, out of 40 respondents, 33 (82.5%) are experiencing a very challenging

situation, 7 (17.5%) are having a somewhat challenging situation. While not challenging has 0
frequency.
 Table 6
How do you cope with the impact of oil price hikes on your income?

Cope up of oil price hike Frequency Percentage Distribution

Reduce personal expenses 6 15%

Work longer hours 23 57.5%

Seek additional sources of 8 20%

income

Increase tricycle fares 3 7.5%

Total 40 100%

As shown in table 6, 57.5% who works longer hours that has 23 frequency, 20% who seek
additional sources of income. However, there are 15% who reduce personal expenses and followed
by increase tricycle fares that has a frequency of 3 with an equivalent of 7.5%.
 Table 7
How much is your previous daily income before the oil price increases?

Previous daily income Frequency Percentage Distribution

Below 500 pesos 0 0%

600-700 pesos 26 65%

800-1000 pesos 12 30%

Higher than 1000 2 5%

Total 40 100%

Table 7, indicates that the majority of their previous income before the oil price increases
were 600-700 pesos that has a frequency of 26 (65%), 800-1000 has a frequency of 12 (30%) while
higher than 1000 has a frequency of 2 with an equivalent of 5%,and below 500 has a 0 frequency.
 Table 8
How much is your current income that the oil price has increased?

Current income Frequency Percentage Distribution

Below 300 pesos 5 12.5%

300-500 pesos 27 67.5%

600-700 pesos 8 20%

Higher than 1000 0 0%

Total 40 100%

Based on the table above, with all the 40 respondents, below 300 pesos has a frequency of 5
with an equivalent of 12.5%, 300-500 pesos has a frequency of 27 with an equivalent of 67.5% while
600-700 has a frequency of 8 with an equivalent of 20% and higher than 1000 has a 0 frequency. It
therefore shows that during oil price increased the majority of the income of tricycle drivers are
only 300-500 pesos .
 Table 9
Is your income enough to sustain your daily needs?

Enough to sustain Frequency Percentage Distribution

Yes 22 55%

No 9 22.5%

Maybe 9 22.5%

None of the above 0 0%

Total 40 100%

Based on the table above, with all the 40 respondents, yes has a frequency of 22 with an
equivalent of 55%, no has a frequency of 9 with an equivalent of 22.5% while maybe has a
frequency of 9 with an equivalent of 22.5% and none of the above has a frequency of 0. It therefore
shows that the majority is enough to sustain their daily needs.
CHAPTER V

Summary, Conclusions and Recommendations

The study aimed to examine the impact of oil price hikes on the income
of tricycle drivers and identify the challenges they face in covering their
operating costs during periods of increased oil prices. Through data collection
from a sample of tricycle drivers, various factors were explored, including the
frequency of oil price hikes experienced, the adjustments made to tricycle fares,
changes in passenger demand, challenges in covering operating costs, and the
coping mechanisms employed.
Based on the indicated findings, the following conclusions were drawn:

Impact on Income: The findings revealed that oil price hikes had a significant impact on the income
of tricycle drivers. A majority of the respondents reported a decrease in their income due to
increased fuel expenses.
Fare Adjustments: Tricycle drivers commonly adjusted their fares in response to oil price hikes.
However, the frequency and magnitude of fare adjustments varied among respondents.
Challenges in Covering Operating Costs: Tricycle drivers faced significant challenges in covering
their operating costs during oil price hikes. The increased fuel expenses posed a financial burden,
making it difficult for drivers to maintain their income levels.
Coping Mechanisms: Respondents employed various coping mechanisms to mitigate the financial
impact of oil price hikes. These included reducing personal expenses, working longer hours, seeking
additional sources of income, increasing fares, and collaborating with other drivers.
Fare Regulation: Local government authorities should establish guidelines for fare adjustments
during oil price hikes to ensure fairness and protect both the drivers and passengers from potential
exploitation. Clear and transparent regulations can provide stability and predictability to the fare
adjustment process.
Financial Literacy Programs: Initiating financial literacy programs for tricycle drivers can equip
them with the necessary skills to manage their finances effectively during periods of oil price hikes.
Such programs can provide guidance on budgeting, savings, and financial planning, empowering
drivers to navigate through economic challenges more successfully.
Collaboration among Tricycle Drivers: Encouraging collaboration and cooperation among tricycle
drivers can lead to collective strategies for mitigating the impact of oil price hikes. By sharing
resources, knowledge, and insights, drivers can collectively negotiate better deals on fuel purchases,
pool funds for emergencies, and support each other during challenging times.
Long-Term Solutions: It is important to explore long-term solutions to reduce the vulnerability of
tricycle drivers to oil price hikes. Promoting the adoption of alternative energy sources, such as
electric tricycles or hybrid vehicles, can help reduce dependence on fossil fuels and provide a more
sustainable and cost-effective transportation solution.
By implementing these recommendations, policymakers and stakeholders can address the challenges
faced by tricycle drivers during oil price hikes, ensuring their income stability and overall well-being.