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What Industries Are Affected by the Oil Crisis –
2008 Cricket Diane C “Sparky” Phillips
07-28-08

1.  Transportation of every retail and wholesale product is affected by the higher cost of gasoline and diesel fuels.

2.  Shipping for office paperwork and other basic movement used by businesses from courier services locally and sending anything across the country or overseas.

3.  Postage costs are bound to go up due to the higher cost of fuels.

4.  Contractor costs require “on location” travel which has cost increases – this affects every sector from building to business mobility – contractors and subcontractors.

5.  Consequently, food costs are rising – each farm has higher operating costs for fuel to use its equipment and ship commodities to market. And, therefore, the restaurant operating costs are also increasing.

6.

Fuel Cost +           Transportation             Cost of Doing               Every Product
Business

7.  Building supplies all go up in price because of overall cost increases.

8.  Packaging costs, shipping supplies, office supplies costs – all increase in price.

9.  All plastics and chemicals being made from petroleum increase in cost.

10. All paper costs, production costs of any and every item being manufactured increase.

In truth, the basics of value in our US and Global economies are not based in “confidence” but rather in crude oil and the energy and fuel costs involved in every facet of our societies.

Obviously,
Independent truckers and shippers will not be able to absorb the costs and will be put out of business along with huge numbers of small and medium-sized businesses.

So, in final analysis –
1.  The product costs more.
2.  The package to put it in costs more.
3.  The price of moving it costs more.
4.  The business of creating it, distributing it and bringing it to market costs more.
5.  The advertising and promoting it costs more.

And, since demand no longer exists for it because of store closures, business bankruptcies, unemployment, and the value of wages not increasing as everything else does – the number of units sold to accommodate the costs goes down.

As a final note,
some things that are not usually considered that will also go up in costs are –

specialty services,
professional services, accountants, etc.
banking services,
training, conventions and hospitality industries,
books and publications
education services, institutional services, public schooling costs,
administrative costs
ink, paints and coverings (they are predominantly made from petroleum derivatives)
energy costs of producing basic utilities

Written by cricketdiane, 07-28-08

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