Higher Oil Prices
Everybody knows the petrol we pump into our automobiles come from crude oil. Naturally, we start complaining whenever we hear news about crude oil prices going up again. More than just the petrol in our fuel tanks, almost everything else is also affected by crude oil prices.
First of all, other types of fuels are directly affected. Expect your heating bill to go up. Natural gas for home heating also comes from the same source as your petrol. If you do not drive your own vehicle, you still cannot escape higher transportation costs. Public vehicles also consume the same fuel as private cars.
How about the commuter train that runs on electricity? Sad to say, electricity will also rise given higher fuel costs. Majority of power plants still do not use renewable energy. Diesel fired power plants consume diesel fuel to produce electricity.
All sorts of transport are affected by fuel prices. This means buying an airline ticket for that next vacation will become more expensive. Many airlines already started to add fuel surcharges on top of regular air fares. Water transport is not exempt, from the smallest boats, to ferries, to cruise ships. These vehicles also burn petrol or diesel in their engines.
The cost of food will also increase. Farmers don’t plant and harvest by hand. They use tractors to farm. The food they produce will be transported by trucks and factories that process food will have machinery that needs fuel or electricity.
Many other consumer products are directly affected by crude oil prices. Plastic and rubber for instance are categorized as petrochemical products. That’s right, petro is for petroleum. Petroleum means it comes from crude oil. So take a look around and see how much plastic and rubber are used in the items we use everyday. Chances are, the mouse you are clicking with is made of plastic. The computer keyboard is made of plastic. That mobile phone you are using is made of plastic.
Given the fact that almost all commerce involves some mode of transportation, it will become more expensive to operate a business when fuel prices go up. Thus everything is at least indirectly affected by rising fuel costs. This means companies will have to raise prices for their goods and services sooner or later. Banking institutions and companies who sell car insurance will also feel the higher cost of doing business. Even your cleaning lady and local plumber have to charge you more for their services because they cannot survive the higher cost of everything they have to spend on.