Higher fuel prices extend pain beyond pump
Posted April 11, 2008 6:21 p.m. EDT
Updated April 30, 2008 6:03 p.m. EDT
Raleigh, N.C. — Record gas prices affect more than the drive across town, according to economists.
The average price of a gallon of unleaded regular gasoline nationwide is $3.35, up 55 cents from a year ago, according to AAA, which surveys 60,000 gas stations across the country each day. In the Triangle, the average price is $3.33, up 57 cents from a year ago.
The cost of oil is fueling market-wide inflation, said Mike Walden, an economics professor at North Carolina State University.
"We've seen inflation outside of gasoline running about 2 (percent or) 2.5 percent a year. Recently, however, it's been running closer to 3 (percent or) 3.5 percent," Walden said. "Gas is an input in most things we buy because most things we buy have a fuel component."
Plastic uses petroleum, so food packaging costs have increased. Some ingredients like corn, which is increasingly used to make ethanol as an alternative fuel, also have gone up in price.
"We're taking corn, which is important as a feed to livestock, out of the food system and into the fuel system," Walden said.
A price of an individual Little Debbie cake, for example, went from 25 cents to 35 cents last fall because of the added costs. The price had remained at 25 cents for 25 years.
Little Debbie spokesman Mike Gloekler said higher fuel and corn costs "definitely played a part" in the price increase.
The price of gasoline itself also pushes up food costs.
"We in this country rely on products and, to some extent, services being driven by vehicle," Walden said.
Tremayne Bass said the price of soft drinks he stocks in area convenience stores and supermarkets for Long Transport Inc. have gone up more than 25 percent in the past year because of fuel costs.
"Some of our sodas are around $19, $20 a case. That's up $4 in the past year," Bass said.
Pizza restaurants have adopted surcharges of up to $1.50 for each delivery, and moving companies and flower shops are also charging higher delivery fees.