Oil and Gas - The Mother of Inflation - GineersNow Petroleum magazine

C O V E R
S T O R Y
Price of Goods
Thanks to productivity and
technological advancements,
there is a bright side, albeit one that
customers may not immediately
see. When we examine prices as a
percentage of income, many items
aren’t any more or less of a drain
on wages now than they were a
generation ago. In other words,
income increased more quickly
during this time even though many
things are now more expensive
than they were in 1998.
In terms of energy, the average
cost of residential utilities like
electricity and cooking gas is a
lesser percentage of salaries.
However, in recent months,
customers have been spending
over 1.5 times more to fill up their
gas tanks, and the profits from fuel
oil have more than doubled.
When it comes to protein, items
like steaks, bacon, and roasts are
more costly, but chicken, pork
chops with the center cut, and
some other types of beef are less
expensive now than they used to
be.
coffee is now considerably less
expensive than a cup of coffee
from a specialty café.
Along with other essentials like
whole milk, pasta, wheat, and
bread, rice, which is regarded
as the most important food in the
world since it feeds half of the
world’s population, costs less as a
percentage of income.
Since the beginning of the
1990s, inflation has been mostly
nonexistent with a few minor
exceptions. In fact, the Fed has
been more concerned about
avoiding deflation. Consumers
haven’t experienced inflation at
this level in a very long time, so
you can’t blame them for being
alarmed by the present rate of
price increases. It will take a long
time for inflation to decline to the
Fed’s objective of 2%. Even if
there have been some pockets
of moderate price growth in core
commodities, gas prices continue
to rise along with strong service
costs.
Like fresh tomatoes, strawberries,
and bananas, many agricultural
products are less expensive.
Wine costs significantly higher
on average whereas orange juice
and malt beverages are less
expensive as a percentage of
income. Additionally, roast ground
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