Supposedly, the price of oil has a lot to do with our overall economy. Every time the price per barrel of oil goes up, so does the price of gasoline and diesel fuel. As the prices at the pump go up, so does the price of consumer products. The general public is told that the prices for groceries and most of the products we buy cost more to transport so the price has to be passed on to you and me.
But how true is that excuse to raise prices?
On the surface it sounds logical, but what happens when the price of oil drops? Do the prices of groceries and other products drop accordingly? If the reason for the price hikes is truly dependent upon the price of oil, then prices should go down when oil prices drop, but that rarely happens.
In June 2008, the price of a barrel of crude oil peaked at $144.78 a barrel. Consequently, a month later in July the price of gasoline average $4.41 cents a gallon. By September 2008, crude oil dropped to $112.32 a barrel and gas prices dropped to $3.39 a gallon.
In 2008, we were paying $1.68 for a loaf of bread, $2.65 for a gallon of milk, $1.29 for a dozen eggs and 32¢ a pound for potatoes ($5.94 total).
By February 2009, crude oil prices had dropped to $43.66 a barrel. That same month, gas dropped to $2.51 a gallon at the pump but consumer prices continued rise. For all of 2009, crude oil averaged $67.90 a barrel, less than half of the price in June of 2008.
However, in 2009, we were paying $1.77 for a loaf of bread, $2.69 for a gallon of milk, $1.34 for a dozen eggs and 55¢ for a pound of potatoes ($.6.35).
By November 2015, gasoline was averaging $2.21 per gallon and we were paying $1.98 for a loaf of bread, $3.98 for a gallon of milk, $2.77 for a dozen eggs and 78¢ for a pound of potatoes ($9.51).
From 2008 to 2015, gasoline prices have dropped $3.39 per gallon to $2.21 per gallon, a 35% drop overall. Yet the price of these basic grocery items went from $5.94 to $9.51, an increase of $3.60 or 60.6%. Note that this huge increase in the cost of grocery items has taken place since Obama first took up residence in the White House.
They blame oil for the increases, but when oil drops, they find other reasons to explain the steady increases in prices we see in the stores, such as weather and diseases. The bottom line is that when they blame cost increases solely on the price of oil that’s just another lie they feed the American people to explain making it harder on most families to put food on the table, because when oil drops, prices don’t drop with them.