If gas prices continue rising, paying $10 per gallon might become our reality. Life would go on, of course, but the increased expenses at the pump would certainly have a huge impact on the majority of Americans. Remember, those fuel prices are reflected in everything we purchase.
From MSN Money:
"It's hard for people to stop using fuel," says Fred Rozell, the director of retail pricing for the Oil Price Information Service, which tracks gas prices at more than 100,000 stations around the U.S. "They must still drive to work. They can only do so much telecommuting or carpooling. Most driving is still needed, and people make up for the increased cost in other areas of their lives."
There would be less money for other goods -- food, clothing, building materials, etc. -- and those items would be more expensive, because companies would pass on their higher transportation costs to consumers, says Troy Green, a national spokesman for AAA.
How much more expensive? Todd Hale, a senior vice president at research company Nielsen, says $10-a-gallon gas could boost the inflation rate to 10%. The result would be devastating to the world economy and to the global food situation, he says.
In the U.S., the restaurant business would be the first to see the reduction in spending as people cut back on how often they ate out, says Rozell. That probably would cause some restaurants to go under.
The grocery business would then see the effects, as shoppers switched from premium to store brands, used more coupons and waited for sales.