Who Wins And Who Loses When Gas Prices Spike?
Wednesday, March 9, 2011 at 1:00 PM
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Rising gas prices take a toll on consumers' pocketbooks, but they can also encourage greater conservation throughout the economy.

Rising gas prices take a toll on consumers' pocketbooks, but they can also encourage greater conservation throughout the economy.

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As oil prices spike on the world market, the rising cost of gas is taking a toll on consumers. Steve Everly of the Kansas City Star explains what's behind the current price hikes, and Chris Steiner of Forbes explains the potential impact if prices continue to rise.

As oil prices spike on the world market, the rising cost of gas is taking a toll on drivers at the pump. For the average driver, the higher prices amount to approximately $35 more per month, Kansas City Star reporter Steve Everly tells NPR's Neal Conan. For the average two-car family, says Everly, "that's enough to wipe out" the 2 percentage point payroll tax cut that a lot of people "hoped would spur the economy on."

Consumers are also seeing increases in air fare costs, says Everly, and can expect the cost of shipping and other products and services to rise, as well. "The worry of economists is things like that are soaking up a lot of disposable income, and what could be spent on other things are being soaked up by higher fuel prices."

"A lot of people are in bad spots when it comes to choosing between food, fuel and shelter," says Chris Steiner, author of $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better. But while rising fuel prices hit individuals hard, Steiner argues that there are some potential long-term benefits, as well. "We saw how people changed their behavior in 2008," when the average gas price peaked near $4 per gallon, Steiner tells Conan. "If you were a mass transit rider regularly, you remember seeing a lot of new faces. ... People left their cars at home and got on the commuter rail systems."

Steiner also notes that the high fuel prices of 2008 ushered in significant improvements in the domestic car industry. "Our overall fleet has gotten more fuel efficient. American carmakers are making better, more fuel efficient cars," says Steiner. "They're staying profitable even as the price of gas goes up. ... That's going to help us get through these periods."

Copyright 2013 NPR. To see more, visit http://www.npr.org/.


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