Gas Stats: How Rising Fuel Prices Affect Logistics

by

Analyst, Software Advice

Businesses executives around the world are experiencing lighter wallets, higher blood pressure, and more logistical nightmares.

The cause? Rising gas prices.

As consumers, we feel it at the pump. But businesses also rely on efficient (read: cheap) transportation to survive. Many consumers fail to realize the effect soaring energy costs have on other commodities, such as minerals, food, and consumer goods.

So just how bad is the rippled effect of $100/barrel gasoline? Let’s take a look and see just how much rising gas prices affect everything else we buy.

Gas Prices Are Approaching Record Levels

Adjusted for inflation, even the oil crisis of 1979 only brought gas prices to about $3.50 per gallon. That’s a far cry from the $4.00 per gallon range we’re approaching. In the past two years ago, gas prices have nearly doubled in the US, and crude oil is now regularly topping $100 a barrel.

Average Prices of US Gasoline January 2009 to April 2011

We’ve Got It Pretty Good Here in the U.S.

But maybe Americans shouldn’t complain. Taking a look at some global gas prices, other consumers across the world are paying much more for gas—mainly due to higher taxes.

Global Gas Prices May 2011

Higher Gas Prices Are Causing Businesses to Raise Prices

Many fail to think about how increasing transportation costs lead to more expensive raw materials and consumer packaged goods. It seems like the only companies profiting are the ones processing that Texas tea.

Gas Prices Affect Businesses and Consumers

Commodity Prices Are Soaring

There has been a direct correlation between the rise in energy prices, and increases in commodity prices. To show you what I mean, here’s price data that compares January 2010 to January 2011.

Rising Commodity Prices

To-Date, PPI and CPI Inflation Has Remained Tame

To see how large of an effect this really is, one need only look at the rise of the US price indexes over the past few months.

Gas Prices' Affect on Indexes

 
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