The 2017 Savannah Conference was attended by marketing and sales experts from the different gas companies in America. Organizations and gas fuel companies were also present to witness as well as participate in the discussions that were expected during the event. Speakers were tasked to provide thorough presentations about how gas prices impact a country’s economy.
Here are some of the reasons mentioned during the conference.
When the price of gasoline and other fuel products go up, it affects the consumers plus the cost of plane tickets and hiring practices as well. Gas is a vital source of transportation, and homeowners depend on gas as they drive to work. Businesses also depend on logistics and transportation networks across the world.
Public Transport. An increase in gas prices can lead to an increase in some of the public transport vehicles. This will cause people to prefer shared and public transportation, as these offer a more affordable alternative to driving one’s car and sending more in fuel. Although not all commuters are up for this, some would consider the option and sacrifice convenience and comfort to be able to save money.
Airlines. Fuel and oil expenses are among the largest portions of an airline company operating cost. It plays a significant part in its overhead percentage in that if the fuel and oil prices fluctuate, it will tremendously force airline companies to increase their flight ticket prices. To avoid this, sometimes, these companies engage in fuel hedging, wherein they buy or sell the anticipated prices of oil through various investment products. This protects them against fluctuating fuel prices.
Retailers. As gas price increases, voluntary spending of consumers decreases because they are paying more on gas. Shoppers wouldn’t prefer to shop often in malls, and this consequently leads to a dramatic decrease in mall sales. It’s a vicious cycle. From the retailers’ point of view, on the other hand, they are forced to sell products at a higher price due to the increased shipping cost and product prices themselves. Thus, products that need to be transported or shipped could increase too. Higher rates in gas mean higher prices for almost all commodities.