With Gas Prices Down Are You Still Paying More?

With gas prices down to just over $2/gal you could still be paying more than that through everything else you buy. So was that $4.50/gal price of gas intended to help boost the economy?

I know that sounds contradictory. How could high gas prices possibly help boost the economy? People cut down on spending travel when they can't afford to fill their gas tanks. And it hurts businesses because the cost of their supplies and merchandise goes up due to higher delivery costs, reducing their profits. How can that possibly be a boost?

In the short term, it wasn't. But let me explain. As you'll probably recall, businesses didn't just eat those higher expenses. With the gas prices staying high the businesses started raising their prices to pass on the expense to the consumer. Everything from major clothing stores to your local restaurant started raising their prices. Pizza joints started tacking on "deliver surcharges" or increasing the current delivery charges. This is all "due to high gas prices", they'd say.

So now we all got a double whammy. Higher prices of gas at the pump plus higher prices on just about everything else they buy too. People complained about the gas prices but were surprisingly sympathetic about local business prices. I recall going into a usual teriyaki joint for lunch one day and noticed that almost every entree on the menu had been raised by $1 "due to higher gas prices". Someone pointed out the increased prices to (presumably) her friend standing next to her and that friend just shrugged and said, "Well they gotta deal with the higher gas prices too" and proceeded to pull out her ATM card.

Ok, so back to the original question. How did all this help boost the economy? Well, think about this. Gas prices have been back down to just over $2/gal for months now. But have you seen any business drop their prices back down to what they were prior to the gas price hikes? Have you seen a single pizza place eliminate or lower their "high gas prices" delivery charge? I sure haven't.

So when gas prices dropped it was an instant and effortless increase in revenues for all those businesses that had jacked up their prices when gas was high. And consumers were so tickled by the fact that they weren't going broke at the pump they didn't even notice they were still getting stung everywhere else. A nice boost for businesses indeed!

I'm probably wrong. I doubt the whole gas price thing was set up just to give businesses an excuse to raise their prices so they'd profit when gas prices dropped again.

But whatever the reason the result is that we are still indirectly paying higher gas prices and we need to start calling them out on it. It's just wrong that they are continuing to use an excuse that's no longer valid to justify higher prices and delivery charges. Call your lawn service company and ask them, "Remember that $10/month increase you tacked on a while back due to high gas prices? Well, now that gas prices are down, I want that previous rate I had." Next time you order pizza ask them why you're still paying that "high gas prices" delivery. Or, better yet, tell them you're not ordering from them until that fee is eliminated or reduced and order your pizza from a place that didn't hike their prices.

We're all still paying higher gas prices through the increased prices on goods and services that businesses haven't lowered since their costs were reduced. Time to start fighting back and not just let them take advantage of us. If we don't they'll use every excuse they can to do it again and again.