The Impact of Gas

It is amazing how the increase cost in one good can cause such a change in the price of other goods. We all feel the pain when we go to the pumps to fill up, but not many of us have thought about how higher gas prices will cause other prices to increase. The article I found points out that we are facing the largest increase in wholesale in the past 15 years. I wonder how much more we can take before we face real problems.


ethan said...

I think that there will be a huge impact to all prices if gas stays high in price. Everything that we have or do in some way relates back to the use of gas. It could be from its transportaion or it was used in the making of the item. I just hope I can make more money to pay for it all.

sara said...

Maybe if gas prices stay this high for a long enough time, the market will put pressure on entrepreneurs to create or switch to substitutes. Hopefully one day we are all driving hybrid cars or even entirely electric. Until then, I guess we have to deal with high gas prices.

Morgan said...

I completely agree with Sara. If the U.S. made it mandatory that all cars within the next ten years had to used propane, or some other alternative method of energy, etc, gas prices wouldn't be such an issue. I think the political giants in this country are awful chummy with the big oil industry, and unless funding stops trickinling into their fat pocketbooks from the oil cos, I don't envision politicians making any major advances in the state of energy prices anytime soon.

Alex said...

It's crazy how you don't think about stuff like this until someone points it out. Just as Ethan said, everything relates back to gas. After realizing all of this, I'm just excited to see gas prices finally falling again. Happy day!

Dr. Tufte said...

-1 on Morgan's comment for spelling errors.

Interestingly, the price of "everything else" is far less sensitive to oil prics than it used to be. This is because high oil prices in the 70s and 80s got people to move away from oil-intensive production.

Sara and Morgan - you should be smarter than to buy into this nonsense about hybrids and electrics. Those still require power generation, almost all of which comes from fossil fuels. What hybrids and electric do is put distance between the generation of power (and its pollution) and the area where you are traveling. The people who want you to get a hybrid just don't want you driving by and polluting their neighborhood. That's perfectly reasonable, but it only makes their neighborhood cleaner - it does nothing for the world as a whole.

And Morgan ... don't you think that if they mandate propane for cars that we'll just have propane crises instead of oil or gas crises?