Gasoline Prices And Their Effect On Inflation
Gasoline prices always rise. To many consumers, this means adjusting their budgets to the swing and sway of the gasoline industry. Of course, the effect on inflation is always the first element impacted by the rise in gasoline prices. The reason is simple. Gasoline has been the singular source for transportation by commerce and individuals. Thus, when the price of gasoline increases, it’s an indicator of price increases in virtually anything that is shipped via airline and commercial trucking. This includes food, clothing, industrial parts and equipment as well as the agricultural industry.
Consumer Inflation – A Roller Coaster Ride
For consumers, gasoline prices are always the major indicator of their own personal financial stability. Yet, few consumers take the time or trouble to step back and see the bigger picture of gasoline pricing. More drilling permits have been issued than ever before and more oil is being refined across the globe. Still, gasoline prices rise. The Oil Industry uses the price of a barrel of crude oil as the barometer for how high gasoline prices will rise. Consumers consistently seek an end to their dependency on gasoline that so heavily impacts their budgets.
Be An Informed Consumer
Very often, consumers accept at face value that the price of a gallon of gasoline must always increase. The informed consumer does their homework and takes the time needed for a thorough evaluation of why gasoline prices play havoc with the economy and their household budgets. An educated consumer is one who has a wider range of options to consider. Awareness of the impact of gasoline prices is heightened and allows consumers to make necessary changes to their use of gasoline. Reducing the reliance on gasoline is essential to economic stability and to maintain a healthy level of inflation.
The Other Side Of Inflation – Deflation
Law tends to think of inflation as a balloon that is continually expanding in size. We know that a balloon bursts when filled with too much air. Now, assimilate this to incremental increases in gasoline prices. Note that the gasoline industry follows a consistent trend of price increases incrementally. The reason is obvious. Gasoline prices, like that over-filled balloon would be unaffordable and the gasoline industry would lose monumental market share it presently enjoys. In order to recoup the losses of market share, the gasoline industry would suffer severe deflation.
Gasoline Prices Hinder Consumer Inflation
Gasoline prices hinder consumer inflation in several ways by:
. Increasing the cost of consumer goods
. Inflating costs related to the travel and airline industries
. Creating an unpredictable economic stability
. Negatively affecting personal retirement and investment accounts
How To Keep Consumer Inflation In Check
Consumers should avoid assuming gasoline is a constantly renewable energy. This helps keep inflation in check by providing alternative energy options. An annual audit of how much gasoline is used by individual consumers can assist in creating reduction in use and at the very least, an awareness of more strategic transportation and travel planning. A serious reduction in consumer use of gasoline begins to have a positive impact on overall inflation by association to other goods and services linked to the gasoline industry.
Gasoline pricing trends indicate consumer inflation is evolving. Today, consumers optimize their options where their gasoline consumption is concerned.
This article was contributed by Phil Balbo. Philip is a law clerk and staff writer for injury lawyers in Maryland and Virginia.