Gas Prices: How High Can We Go?

Just as the economy seems to be showing sustained signs of growth, will high gas prices put the kibosh on economic recovery? A recent Gallup poll asked Americans how high the cost of gasoline would have to rise to significantly impact their lifestyles and spending. On average, gas prices of $5.30 to $5.35 per gallon were cited as the "tipping point."

National average gas prices now stand at nearly $3.90 a gallon, but in many areas, that's been well over $4 for a while. But depending on where you live and who your target customers are, gas wouldn't have to climb all that much higher to cramp their style. Twenty-eight percent of respondents claim they would be forced to make significant spending cutbacks if gas prices were between $4 and $4.99; 31 percent report they would do so if prices were between $5 and $5.99.

Why it matters to your business: With reports that gas prices could top $5 a gallon in many areas by summer, you need to take steps now to plan for the possibility. You might need to offer greater discounts, provide delivery services or curbside pickup, offer ecommerce options so customers don't have to drive to your store or set up subscription purchase services so they can have products they buy regularly delivered by mail. All these options will cost you more money, so you'll need to figure out ways to tighten your business's belt.

Comments

[Steven Carver]

07:22 PM on 02/16/2013

Gas prices are on the rise because the federal reserve is printing 85 Billion Dollars a month every month out of thin air this is devaluing the US Dollar so your dollars buy less and less the US Goverment is basically resorting to the printing presses now to pay its bills as they print more and more money it causes prices to rise so this means they have to print even more money to meet the ever rising prices this will eventually lead to a Hyperinflationary collapse

In 1914, before World War I, a loaf of bread in Germany cost the equivalent of 13 cents. Two years later it was 19 cents, and by 1919, after the war, that same loaf was 26 cents - doubling the prewar price in five years.

Bad, yes -- but not alarming. But one year later a German loaf of bread cost $1.20. By mid-1922, it was $3.50. Just six months later, a loaf cost $700, and by the spring of 1923 it was $1,200. As of September, it cost $2 million to buy a loaf of bread. One month later, it cost $670 million, and the month after that $3 billion. Within weeks it was $100 billion, at which point the German mark completely collapsed.

[SBCashFlow]

08:20 PM on 06/08/2012

The impact of higher fuel costs on small business owners can put some out of business. By tracking your costs and watching your margin on a monthly basis, you can start to see the impact and have the ability to make changes before it’s too late.I have a new blog post on rising gas prices at www.smartbusinesscashflow.com.

[spyker1]

11:59 PM on 04/28/2012

Switch to propane. It's 2 dollars a gallon.

[werowe]

10:51 AM on 04/05/2012

The USA is sitting on top of the solution. They have higher natural gas reserves that everyone except Russia. Natural gas too does not spew carbon moxonide nor nitric oxide into the air as does gasoline. Here in South America we have 4 million natural gas vehicles while the USA has only 125,000. What is the problem up there? http://www.gringolandiasantiago.com/2012/04/05/natural-gas-vehicles-what-the-usa-could-learn-from-south-america/

[Bob Allgaier]

03:20 AM on 04/02/2012

In most cases,the economy is more negatively affected by the increased costs of diesel fuel,rather than gasoline.Historically,diesel fuel was always less expensive than gasoline.Diesel fuel is virtually the same as #2 heating oil,however subject to increased taxes when used for transportation.The trucking industry hasn't "squawked" enough about the inflated cost of diesel fuel because they view it as a "pass thru" tax to the consumer.This is a major issue and one that should receive some tax relief to stimulate the economy.If the average consumer had any inkling of how much the increasing cost of diesel fuel is actually affecting them,I dare say the increasing cost of gasoline in most cases,pales in comparison.

[reader1]

06:15 PM on 03/30/2012

Well, my bike and two feet are looking better everyday. I already know the changes I will make. I refuse to give my hard earned money to the Oil pimps. So there!

[mrbfh2]

04:55 PM on 03/30/2012

To all you perfect people. The average person cannot afford a Prius or Volt. Nor can the average family fit in one. High gas prices affect every aspect of our daily living. Food prices are going to skyrocket. Not to mention every single good that is delivered by truck. Wake up!

[Suri Zog]

03:15 PM on 03/30/2012

I think that by letting the prices rise the market principles will finally take over. But even so the high prices are taking their toll, I drive every day and there are few options for public transportation. Ever since prices rose to over $4 I've been researching the cheapest gas online. This site has been really accurate for me: http://www.allstate.com/gas-price-locator.aspx

[Ronald Malaney]

03:10 AM on 03/30/2012

Its rather simple all those that want at least $6.00 a gallon fuel next year, vote for Obama all those don't vote for any one else. because next year he will have more "flexibility".

[SteveFromEuless]

04:37 PM on 03/30/2012

Oil is an international commodity.
The President has no control over the "free market" pricing of such a commodity.

Don't trust me, just ask Bill.
Bill O’Reilly: Gas Prices 2008
http://www.billoreilly.com/video?chartID=556&vid=333743448050031580
http://mediamatters.org/blog/201203150005
http://www.pensitoreview.com/2012/03/07/fox-news-schools-its-viewers-rising-price-of-gas-not-the-presidents-fault/

Under this President:
- Drilling has increased.
- Production has increased.
- Supply has increased.
- Alternatives are being explored and funded.
- Also, the CFTC is trying to reign in speculation.

Other factors that influence the price of crude:
- Tensions in the Middle East and with Iran.
- Growing demand in China and India.
- Recovery of the World economy.

Other factors that influence the price of gas:
- 5 oil companies control 55% of the refining capacity. They have no incentive to push more gas on the market, unless the price meets their needs.
- Refining capacity is down. Companies don't want to invest. It is against their interest to create more supply, thus propping up the price of gas.

The President has nothing to do with it.

[Ronald Malaney]

02:26 AM on 03/31/2012

B.S.

[masanf]

09:06 PM on 04/02/2012

Amazing how those who now claim "the president has nothing to do with it" are the same ones who screamed the loudest when prices skyrocketed under Bush. I would be willing to bet everything I own you were in that category.

As for supply increasing under this president, drilling on public lands is at a near low. The supply is coming from private lands. And event the NY Times admitted that this so-called record supply now coming on the market that was drilled for during the Bush administration. The notion that Obama is somehow responsible for a "record" supply is a lie, period.

[ww745]

10:52 AM on 03/31/2012

That is correct Ron. Liberals try to compare this to when Bush was in office. I remember all the stories then about starving babies because people had to buy gas instead of food. Now they are just trying to protect Obama. Gas hit 4.24 a gallon here inder Bush. The part no one is mentioning in the left wing media is that gas was 147.00 a barrel. Fridays close was 103.02 a barrel yet gas is 4.34 a gallon here now. Quite a big disparity from when Bush was in office. Yet the left is quite silent now about the starving babies.
As for what Steve wrote:
- Tensions in the Middle East and with Iran.
- Growing demand in China and India.
- Recovery of the World economy.

These things were going on and we had 2 wars. Now we only have one war. As for Iran. The Saudis already said that if trouble cut Irans oil production they would make it up. As it stands now Irans production has not been cut. Yet the Saudis have already increased production. They say that oil companies make 6.2 cents a gallon. The government gets 18 cents a gallon. So where is all that extra money going seeing that the present cost per barrel is only 103.02 and a gallon here is 4.34?

[IMeMine]

09:47 PM on 03/29/2012

If higher gas prices will get Americans out of their gas-guzzling full-size truck, oversize SUVs, and vans, I'm all for it.

How many times a day do you see gigantic Suburbans moving down the road with one person on board? For decades, Americans have refused to compromise; they've insisted on buying big, bloated gas hogs while rest of the world has been driving compact, fuel-efficient vehicles. It's time for a change. It's long overdue.

[masanf]

09:09 PM on 04/02/2012

Rising prices always hit the poor the hardest. Only a left-winger would be arrogant and ellitist enough to claim this is somehow a good thing. As for the rest of the world driving fuel-efficient cars, boy that really has made an impact on their $8/gallon gas prices, hasn't it?

[Kenz300]

02:43 PM on 03/29/2012

Owning that big SUV or pick up might not seem like such a good idea now.

You pay for those gas guzzlers in higher insurance, plates and fuel.

[Kenz300]

02:40 PM on 03/29/2012

Long haul truckers are moving to LNG.

GM, Ford and Chrysler are selling CNG fueled pick up trucks this year.

Honda sells a CNG fueled car.

It is time to end the oil monopoly on transportation fuels. We need a choice at the pump.

Bring on the electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles.

[SteveFromEuless]

04:40 PM on 03/30/2012

Perfect!

If the Fed would convert some of it's fleet, like the Post Office is doing, then the price per vehicle would come down, making these alternative fuel vehicles more attractive to the average consumer.

Toss in some incentives for the "distribution" of these alternative fuels, and we can make the change away from petrol.

End the monopoly!

[masanf]

09:13 PM on 04/02/2012

The change away from "petrol"? You mean a change that requires neverending government subsidies, like it has in every European country that has forced its citizens to use "alternative" energy sources? Is that the change to which you are referring?

I just love people who decry tax breaks for oil companies then turn right around and tell us we need to directly subsidize, in perpetuity(just look at Germany, for example, to see the level of subsidies required), alternate fuel companies that couldn't turn a profit even if oil were declared illegal.

[Kenz300]

02:37 PM on 03/29/2012

As gas prices continue to rise we will all begin to change our habits.

We will walk a little more, ride a bicycle a little more and take mass transit a little more.

We will also thing more about energy efficiency when we buy our next car, truck, appliance, home or even light bulb. LED light bulb use only 25% of the energy of regular bulbs.

40+ mpg is better than 18 mpg.

Individuals, business and politicians all need to develop a plan to deal with higher energy prices in the future. Energy efficiency and alternatives are part of the solution.

[Ronald Malaney]

03:04 AM on 03/30/2012

we will work longer for less, spend less time with our children, buy the cheapest food, not keep up our houses or yards, abandon our pets, donate less to charity,repossessions will continue to rise, more unemployment, less resources for forest fire fighting, more crime,ect. sounds like a libbs Utopia

[mxfw9999]

12:39 PM on 03/29/2012

This is simple to solve remove the taxes on gas reported yesterday fla has 56cents per gal of tax . Dont know the fed amount but just take off the taxes and you will go down at lest 75 cents a gal.

[plcsail]

10:04 AM on 03/30/2012

and the roads will just repair themselves, and the highway patrol will work for free. You didn't think very far ahead on that one.

[mxfw9999]

12:08 PM on 03/30/2012

Get the people on food stamps and welfare to repair them pick and shovel. The patrol does not come from the tax

[MCTSilverlakeCA]

04:54 AM on 03/29/2012

In the 1970's when gas was cheap - but unavailable- we had gas lines and alternating car license plates denoted which day you could buy gas on. People carpooled, people took the bus, people biked and walked, people chose and started businesses closer to home, people moved closer to their industries. Today gas pricing is outrageous- and- people are carpooling, taking the bus, biking, walking, moving -- Mass Transportation which was started in the 1970's- and abandoned frequently so States could raid those funds for more popular uses- has returned- but is still in its infancy, electric cars that were promised "in 20 years" but were delayed by major corporations who had heavy investment (and profits) in oil- have only recently reached market - at exorbiant prices- in the hopes of their manufacturers that they can declare them too low a sales profit margin level and return to gas guzzlers- (and their ever increasing oil profits-caused much by speculation of their investors and selective shutting down of operational plants to keep prices inflated). For 40+ years - it's been "Same old, Same old" - I don't see any major changes as long as the oil industry and car manufacturers have hands in each others pockets and Oil is not seized by the US Govt as a NATIONAL Natural Resource and the speculation and stalling/price inflationary tactics-stopped.