Even though oil barrel prices have dropped almost 50 percent since June, consumers may not reap the benefits as one might think.
Although paying less at the pump allows for more cash in your wallet for the present time, companies are already talking about layoffs because of the overstock in our reserves.
Finch Ratings and other economic experts suggest the slump in prices can be quite detrimental to state systems that have been existing on budgets derived from oil sales.
What This Means for The People
Why We Can’t Turn Back the Clock
One of the main reasons we can’t go back to a more affordable way of life is that although gas prices were the reason for most companies raising prices, these same companies have no plans on dropping prices because they want an even bigger profit.
Our Environment Also Pays the Cost
Although there is often talk about utilizing clean energy sources (such as wind or solar), the bottom line is that government officials know their budgets will be dramatically cut if we do so. Ninety percent of Alaska’s government budget is funded by their oil sales. So why would they follow through with any initiative to use clean energy that would replace their cash cow?
Don’t Expect to Fly Cheaper
Remember when airfares became (and still are) unbelievably higher because of the price of oil? With the prior years of airlines consolidating and supposedly going through “hard times,” they know people will continue to pay their airfare prices of today and reap the profits.
In the end, farmers that have often pre-purchased their fuel or other supplies prior to the drop in oil, cannot pass the savings on to the consumer. Subsidized programs most needed for lower income residents may become non-existent. So who are the real winners when the oil prices drop?