PEANUT BUTTER AND PETROLEUM PRICES

 By: Jake Jakubuwski

Here’s the way I see it…

 Even with petroleum prices easing somewhat — although we’re still paying more for gas then we were last year — it’s easy to lose sight of the fact that what we pay for gasoline does not represent the full impact of steadily increasing fuel prices on our pocketbooks. When we buy gas, we tend to see only the immediate and personal shock of those prices when it costs us more to fill up our tanks today, then it did yesterday.

So what if you don’t drive, own a car or a gas-powered lawn mower? Even if you don’t buy gasoline or heating fuel — today’s petroleum prices are going to hit you square in your financial fanny! 

The higher fuel costs that cities, counties and states pay to operate their fleets, repair roads and build sewage systems, in turn, will ultimately trigger increases in property taxes, and “user fees”.

Increasing fuel costs will result in higher insurance rates for your cars, homes and businesses because the increased costs of manufactured, processed and salable commodities—including car parts and building materials—will affect the insurer’s financial risk. If it costs an insurer more to repair, replace or refurbish cars or cottages after an accident or disaster, those costs will be passed on to the policy holders!

When the higher costs of fuel inhibits travel and the motel industry suffers declining occupancies, they will not require as many maids to clean and “make-up” the rooms each day. Those unemployed maids may file for unemployment benefits which puts further strains on governmental coffers. Demands that will, in one form or another, be passed on to the consumer and taxpayer. 

Restaurants, movie theatres, pizza joints and paint stores will be affected by increased petroleum prices. The effects will be two-pronged: It will cost the businesses more to get the food, film and finishes that they sell delivered to the store —— and they will (If they are not already) suffer from declining sales because consumers who are putting more money in their gas tanks, will have less money to spend on discretionary purchases.

The peanut farmer is forced to pay more for fertilizer and tractor fuel to make their crop. When the peanuts are harvested, the crop is put on trucks and sent to co-ops, buying stations, or processors; where they might be turned into peanut butter, peanut oil or snacks. Then the jars of peanut butter and other peanut by-products are sent by rail and common carrier to wholesale distribution centers where it is loaded onto other trucks for delivery to your favorite grocery store or retail outlet. Each step in the process; from the farmer’s field to the grocery store shelf adds to the price the consumer will be required to pay because of increased petroleum prices.

At the grocery store we discover peanut butter is forty or fifty cents higher per jar then it was the last time we bought it. The maid who was laid off from the motel can’t afford the more expensive peanut butter unless she receives food stamps from a social agency. The cost of those food stamps will be borne by the consumer and taxpayer — that’s us!

Dow Jones, General Motors, Ford, lKimberly-Clark, Proctor and Gamble, Pete’s Plumbing and even the Solo Cup Company have fallen victim to higher energy costs and supply chain costs.

Obviously, nothing can be grown, manufactured, picked, processed, packaged or sold without considering and factoring in higher fuel costs—costs that are added at each successive stage of the chain from seed to sale—causing the prices of those items to escalate at an exponential rate.    

Since we, as consumers and taxpayers, are at the very end of the “supply chain”, we are stuck with the bill.

Every load of laundry, every flip of a light switch, every Big Mac and every stick of chewing gum will, and is, costing us more.

The cost of gasoline, at the pump, is only a small part of the inflationary feeding frenzy higher petroleum prices are creating. Even if you don’t drive, the peanut butter sandwich you had for lunch will cost you more: because petroleum prices are taking a bigger bite out of everyone’s wallet.