Gas And The Golden Banana

Gas and the Golden Banana

On May 22, 2008, we saw oil prices hit a record $135.09 a barrel. “The nationwide average for a gallon of regular unleaded rose eight-tenths of a cent to $3.952 with experts predicting that number to exceed $4 per gallon as soon as next week” (Cnnmoney.com). The AAA survey shows gas prices are up nearly 10% from a month ago and almost 24% higher from year-ago levels. When consumers go into the Arco for a coke and a fill-up, what they may not be noticing is that the price of that coke is rising faster than that $4.09 gallon of unleaded which had been $3.95 two days before. Someone has to pay Coca-cola for delivering their product and did you honestly think that Arco was going to eat the $.14 increase per gallon to refuel Coca-cola’s delivery trucks? The difference is getting passed to the consumer not only for delivering that ice cold coke in the middle of summer, but as well as the $.02 extra on a postage stamp, and the $2.00 sur-charge on your trash bill. At over $4 a gallon, not only does the price of gas affect our driving habits, it is also responsible for that $4 loaf of bread you just bought as well as the vacant convenience store at the end of the street. As a result you’re seeing more and more people opt for public transportation, generic brands of dog food and much more humbling lifestyles.

At $4 per gallon, who can afford to fill up every other day and stay sane? Obviously not many according to PublicTransportation.org. Mass transit has hit a 50 year high according to the website proving that the price of gas is not only affecting the amount of times people decide to take a trip to the store but as well as how they get there. Public transportation is a great way to commute and I highly recommend it. Not only will it save you money, but by cutting back on the number of cars on the road it will also cut back on the pollution being admitted into the air by cars and trucks.

Other means of transportation doesn’t just mean people are trading their cars in for bus passes or Metrolink tickets, but are also buying motorcycles. This is great news for companies such as Yamaha and Kawasaki but is absolutely horrible for automakers. Many companies thrive from the sales of their larger SUV lines but with gas prices where there at now, companies such as Ford and Chevy are losing money. For instance Ford is selling its top selling F-150 series with up to a $10,000 rebate. Not only is this bad news for the auto maker itself, but as well as the workers they employ. Many jobs will be lost because there is just no profit in the large automobile market. Not to mention the delivery services that deliver car parts to large manufactures are also feeling the effects of the gas boom.

“What can brown do for you?” Ill tell you what they can and are doing. Companies such as Fed-Ex, UPS, and other major freight lines are passing the bill to shippers whether it be large articles that travel cross country, or John Doe shipping a birthday present to his niece who lives in the town next to his. "We are part of the supply chain. The surcharge allows them to plan ahead accordingly," said Lourdes Pena, a FedEx spokeswoman in Memphis, Tenn.

FedEx and rival United Parcel Service are racing to add delivery vans that run partly on electric power in a bid to cut fuel costs. Preston Loos of EDS Waste says his company is tacking on nearly $2 per house. “We hate to do it, Loos says, “but it's something we have to pass on, because we can't absorb it all ourselves.” So next time your driving down the street, remember, that Albertsons’ truck in the next lane isn’t getting any breaks at the pump either and someone has to pay for it.

Three days ago I went to buy my one year old puppy dog food. I went to the same Pet-Co I've been going to since I got the little guy and walked right to the back of the store where the dog food is located. $34.99 for a 30 lb. bag, no problem. I took in $40 just to be safe. When I grabbed the bag of dog food I noticed something. The same exact bag of dog food I bought for $34.99 a month ago was now $47.99! I walked over to the clerk and asked her if the price is tagged right…she said yes. Wow! I immediately asked for an alternative brand, one a little cheaper but of the same quality. Needless to say I bought the generic brand. This is happening throughout retail and grocery stores everywhere. Prices are sky rocketing because of the sur-charge of the delivery trucks. Those sur-charges are being divided into the products you buy so that the retailers and food chains don’t lose their profit. It may actually help food chains such as Ralphs, Albertsons and other grocery stores because many people (including me) are opting for generic brands. The grocery store actually gains a greater profit for sales of their generic brands which could in fact create jobs in the warehouse as well as the grocery store itself. What most people don’t know is that the product is exactly the same as those name brand products and the only difference is the label. Major grocery store chains contract out to major brands and companies to wrap the generic label around a name brand product. Why pay $5.00 for box of cereal when you can get the same cereal in a bag for $2.99?

Who would have though gas prices would affect your public utilities? Well it does. Because of the price of gas, it’s costing

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