[NevadaGhosts]

According to recent news sources, the prices of gasoline and diesel are increasing quickly now. We all know that most goods in the US are transported by diesel trucks. I was wondering how long it will be before we see prices of consumer goods (groceries, etc) start to rise due to rising fuel costs. Anyone here know?

[Zeiter]

This is something that I've been wondering about too lately. Does anyone have info as to roughly what percentage of the cost of certain consumer goods is from oil? If it is only something like 1% right now, a $3 gallon of milk would only cost 3 cents more if the price of oil were to double. But if it is something like 10%, then we're looking at a 30 cent increase, which, combined with increases in other areas, would be devastating to the economy.

[frankthetank]

I would think grocery prices would go up. Everything these days is trucked. I know the profit margin for grocery stores is very slim and they probably have to pass the price increase along. I haven't seen any major increases, however. I'll keep my eye out.

[pea-jay]

I have, but not dramatic or to the same percentage as fuel increases. I wouldn't expext rises to mirror transport costs, though.

For example the Handymart sells product X for $500 apiece. The shopkeeper receives them in 100 unit batches costing $1000 in shipping expenses (per truckload) from factory to store. Lets say the the store is passing on the whole transport cost. That means $10 of that purchase price per unit was due to shipping.

Now lets say rising diesel prices now force the cost to $1500 per shipment. (50% increase) The store owner passes on all of that. Per unit that would work out to only $5 per unit more in transit costs. So the new price goes from $500 to $505. Thats only a 5% increase in costs.

I know this is kind of simplistic and assumes static other raw material costs but my point is simply that yes prices are going up, but for the example given above should not equal oil price growth.

[clv101]

Prices of consumer goods won't go up as much as oil has gone up since we're not buying oil... however remember oil is involved in pretty much everything we do. The increased price of oil effects much more than just the final transport leg to the store. Take a product and look at all the inputs, everything from the fuel that the workers used to get to work, the lights in the factory, the soap in their washrooms etc... this is why peak oil is so serious, it effect every aspect of production. I mean looking at food isn't the cost of 19 our of the 20 calories eaten attributable to oil once packaging and transportation is taken into account?

[JohnDenver]

One simple indicator is the energy intensity of the economy, i.e. the total cost of oil consumed per year as a percentage of GDP.

For 2002, US GDP was $10.4 trillion, oil consumption was 19.7 mbbl/d, and the average price of crude oil was $23. Plugging these figures in and calculating, we get about 1.6%. In other words, the ratio of the amount of money spent on oil, versus the amount spent on all domestically produced goods and services, was about 1.5 : 100. So roughly, speaking, I would imagine that oil accounts for around 1~2% of the price of goods on the average.

$this->bbcode_second_pass_quote('patrickjford', 'N')ow lets say rising diesel prices now force the cost to $1500 per shipment. (50% increase)

[lowem]

Sorry, no references (they archived it under paid subscription), but I read earlier on the local business newspaper that the cost of energy constitutes up to 17% of the costs of running a business.

That's sort of an average and not that very scientific (they did a survey). It will be a lot higher for energy-intensive activities (for example making Coke cans out of aluminium) and a lot lower for not-so-intensive industries (an online retailer using one of her rooms as a "warehouse", for example).

[chris-h]

no references also but the cost of doubling the oil price is expecting to increase price of goods by 10 % .
Localy produced goods will increase by 5 % while goods that are produced in the other side of the world will increase more like 15 % .

[NevadaGhosts]

I was wondering if anyone has an idea when we will start to see the end of disposable consumer goods? When will they start making consumer items to actually last more than a couple of years? Ever?

[Jack]

$this->bbcode_second_pass_quote('NevadaGhosts', 'I') was wondering if anyone has an idea when we will start to see the end of disposable consumer goods? When will they start making consumer items to actually last more than a couple of years? Ever?

[MonteQuest]

The price of polypropylene which is used for plastics went up 57% last year. Peak oil means peak everything that is made from oil. Recycling is a bandaid for a disease. We need to ban most plastic containers, pay the increased price, and return to refillable glass containers, from soda pop to kethcup. We would only recycle that which got broken.

And to when, when we have no other choice.

[MikeB]

When the earth is emptied of consumers.

[Specop_007]

I love it. "Around the watercooler" (Wherever that may be, online, work, wherever.) I hear people talking about gas prices. The majority of the conversation is how much it costs to drive their vehicle.
Thats it. How much they spend in gas to drive.

Its amazing how damned limited the views of a media driven consumer really are. I never hear them talk about the increases in plastics, food stuff, shipping costs, construction costs etc etc etc. The only thing their feeble little minds can wrap themselves around is how much it costs to drive their vehicle.

Peak Oil is gonna be so much fun.

[Doly]

$this->bbcode_second_pass_quote('Specop_007', '
')Its amazing how damned limited the views of a media driven consumer really are. I never hear them talk about the increases in plastics, food stuff, shipping costs, construction costs etc etc etc. The only thing their feeble little minds can wrap themselves around is how much it costs to drive their vehicle.

[UIUCstudent01]

Also, its price is the most reactive in terms of time... Food prices might not appear until a year later.

[RonMN]

My personal favorite of the BRILLIANT statements is when i hear:

"WHY DOESN'T SOMEBODY DO SOMETHING?"

[BiGG]

Isn’t people’s perception simply a product of their environment?

Americans have been living large for decades now and don’t know any other way until reality smacks them in the face. Reality at this point only warrants bemoaning the price of gas.

[tokyo_to_motueka]

morganstanley.com

Mr. Stephen Roach says:

$this->bbcode_second_pass_quote('', 'W')hich takes us to the heart of the problem — America’s consumption binge. Imports don’t come out of thin air. They are a very much a by-product of growth in domestic demand, especially private consumption. And if there is anyone in the US guilty of living beyond his or her means, the American consumer certainly gets the prize. Since 1996, average growth in real consumption (3.9%) has exceeded gains in real disposable personal income (3.4%) by 0.5% per year. Over that period, the income-short consumer has been converted into an asset-dependent spending machine — first drawing sustenance from the equity bubble and more recently from the property bubble. As a result, the income-based personal saving rate has plunged toward zero and households have taken on record debt loads as they extract newfound purchasing power from increasingly over-valued homes. As a result, personal consumption has gone to excess — moving up to 71% of GDP in 2002–04 versus a 25-year norm of 67% over the 1975 to 2000 period. Little wonder that the import content of that consumption has also gone to excess.

[Colorado-Valley]

I sold all my stocks about six weeks ago.

My wife thought I was a nut case, but now I'm turning into a hero!

[UIUCstudent01]

I can't wait!

See history and all.

Watch the world go with a collective, 'wtf?'

I can't wait to see what tomorrow will bring!

I'm giddy, but I also have alot of caffeine in the system, so pardon the chemical inducer.