It may feel like paying for gas only recently turned into an act of masochism, but prices have been on a steady march north for years (if you want to do something about it, here are a few tips for keeping costs down).
As for what the pain at the pump means for the economy overall, scroll on through these five infographics by Michael Koploy of the logistics software site Software Advice for a visual sense of how higher gas prices ripple through different industries, mainly through transportation costs.
Then again, if we paid more at the pump on a regular basis, we’d probably use a whole lot less, and start supporting alternative transportation ideas.
We may get there. Energy and fuel costs are rising faster than most other goods, and bringing the cost of a new car up too:
It’s not always so obvious which part of price increases or service cutbacks are because higher fuel costs cut into profit margins. This next chart does a good job explaining that sticker bump. First, a quick fact check on that top stat, “$25 billion lost from the U.S. economy.”
That’s from a Huffington Post story that included this sentence: “Each $10 rise in the price of a barrel of oil translates into a 25-cent increase in gas prices, which tears more than $25 billion from the U.S. economy yearly, economists say.”
But the complete stat is a bit different. It comes from Deutsche Bank economist Joe LaVorgna, as quoted in the Wall Street Journal:
According to our analysis, a $10 increase in oil prices translates into roughly a 25 cent increase in retail gasoline prices. Every one penny increase in gasoline is then worth about $1 billion in household energy consumption… Therefore, a sustained $10 increase in oil prices translates into $25 billion in additional household energy spending.
So it doesn’t exactly tear out the billions from the economy, but home energy isn’t an dream way to spend disposable income. The rest of the facts hold up as far as I can tell:
The full price increases of raw materials hasn’t been passed on to consumers yet. In some cases that means companies taking a smaller margin, and in others it means they compensate for higher costs by squeezing more out of each employee. Still, it’s pretty startling to see how some goods are climbing in price:
Images: by Michael Koploy of Software Advice, a website that reviews and compares transportation management software. Find Koploy’s article on how rising fuel prices are hurting businesses, here.
