Global gas prices: Decrease affects consumer confidence

By Posted 13 Jun 2011, 10:49

Over the past few days we have seen a decrease in global gas prices, and the affects on consumer confidence has been a positive one. Do not think for one moment that this only affects drivers, but also travelers and shoppers as well. The moment that the price of gas goes down a number of things happen, and it is the consumer that wins out – but for how long?

In the short term people will be happier to spend a little more in stores, but this is not a long-term solution. We all know that when gas prices are high this affects all manner of things, even down to the food that we eat. The reason for this is that it becomes more expensive to get the food to the store in the first place – so prices have to go up.

Now we know that food prices will not change the moment that the price of this fuel goes down however, if it stays lower for a few weeks then you could see the prices of groceries fall. Travelers will also see a benefit as well, as the price of air fair will also go down if these low gas prices continue. We just hope that GM’s CEO does not get his own way with his gas tax proposal.

So we can see that it is win win for the consumer at the moment, but we should not get too complacent. Like we said above, we have no idea as to how long these prices will remain low and if they will go lower. However, we do know that OPEC needs to come to an agreement about increasing output, if they do not soon then will could see prices increasing yet again.