Elevated gas prices hit highly leveraged families hardest

By Posted 18 Jun 2011, 12:23

The recent financial crisis affecting the world has had a major impact on many people. Jobs have been lost and prices have been on what seems like a continuous upward trend. Fuel costs have been one of the biggest concerns for many people, with elevated gas prices hitting highly leveraged families hardest.

As gas prices go up it affects consumer confidence, and also leads to many people into cost cutting measures if less driving isn’t an option. According to an article on WSJ by Kris Maher some small businesses are passing on gasoline surcharges, but some make cuts elsewhere.

Recently the average price of a gallon has fallen back to around $3.67 from almost $4 last month. Even though some say prices may continue to fall back over the summer, they are still $1 higher than last year.

A recent study found that 69% of people asked said they had been affected “quite a bit” or “a great deal”, by the higher gas prices. This compares with 55% affected by the higher food prices, 28% by the increase in job losses, and 22% hit by the increase in home foreclosures.

It is also thought that higher gas prices have a bigger impact on consumer psychology as prices are more apparent. Economist for Purdue University, Wallace Tyner, said “Every gas station has the price posted in big numbers that are a constant reminder of the changes”.

A piano tuner who has to drive around 150 miles per day has had to increase his prices by 8% to help with the higher gas prices. Luckily it hasn’t led to any lost business but he said “It’s just a bad deal for my customers.”

Truck drivers are some of the biggest hit with higher gas prices. Matt Vande Gevel of Rockford, Mich., has worked out he can achieve an extra five miles per gallon from his truck if he plans out his routes carefully. He also sticks to 53 miles an hour and tries to catch green lights on his journey to prevent constant stopping and starting.

The higher prices can even affect people who don’t drive, as a Meals on Wheels program in Canton, Ohio, recently found itself losing volunteers who couldn’t afford the higher gas prices. Some coach companies have seen an increase in passengers though as they turn to alternative transport solutions because of gas prices.

The GasBuddy website has seen a big jump in visitors to its site with people trying to find the places with the cheapest gas. They also have a free application for leading smartphones. Are you driving less since the price of gas has gone up?

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