Consumer Issues

February 12, 2009

Now gas prices has dropped, what’s to blame?

Filed under: consumers — Tomi @ 2:28 pm

Over the last few months, with a lot of the businesses downsizing because of the economic crunch, lots of people have been let go from their work places.  With many people out in the job market, and also because companies are trying to avoid increasing their cost basis jobs are kind of hard to come by and so is money for a lot of families.  Tighter credit limitations sees more people being denied credit and generally many people out there have less cash available to them.

While the burst of the housing market has been blamed for the collapse of the economy, increases in oil and subsequently gas prices has often been blamed by the majority for the increases in the cost of living.  Prices of consumer items including groceries soared in response to oil prices and there is rarely anyone in the country who has not felt the impact of the crunch on their finances. 

I remember that around July, most gas stations around the Princeton area actually place a spending limit on their pumps and sometimes it took two different transactions just to fill my tank since the first one would only do a partial fill.  So I did understand that it cost more to transport the goods to the end user than it normally would.  Over the last few weeks, however, I found that each week, there seem to be a slight drop in the gas price and now, I can fill my tank with just a fraction of what it took to fill it five months ago.  My initial reaction at the discovery of falling gas prices was one of relief that finally, there would be a break for everyone and especially for all the families going through a tough time.

You can imagine my shock going to the grocery store two weeks in a row, now and seeing no difference in the prices in fact I did notice that some items have actually increased in price. The news that black Friday was less successful that it usually is last year came as no surprise to me and why is that so? Well if prices remain the same and people don’t have enough to spend they are bound to prioritize and there is no doubt that most would go for the bare necessities and forgo the wants.  Something sure has got to give and if it’s not the seller cutting down on their profits, then it’s the buyer refusing to pay more for an item. But here’s something I’m yet to figure out. If more and more people have lesser money to spend and gas prices are dropping, can someone tell me what’s to blame this time for high grocery prices? The economy crunch? 

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