Gas prices have risen considerably in the United States over the past six months. According to Gasbuddy.com, the average price for regular gas in the U.S. in November 2011 was $3.43 per gallon. The price peaked at $3.92 in early April, and had gone down to $3.73 on May 11, 2012. The general trend over the last several months has been an increase in price, although the increase has slowed in the last month. Higher gas prices have a large financial effect on businesses, which ultimately leads many to increase product price.
Rising gas prices have major ramifications for businesses in the United States. Cost of shipping is one of the areas where businesses experience the effect of higher gas costs. Increasing fuel costs also lead to increasing transportation costs. This makes the general price of running your business goes up. Additional shipping costs are then passed on to consumers in the form of higher prices.
Your business can also be affected by rising gas prices in less visible ways. For instance, consumers drive their cars less to save on gasoline, causing them to frequent businesses less often. Less driving also means that there is less drive-by traffic to see a business’ advertising.
The U.S. government forecasts an average gas price of $3.79 for the 2012 summer driving season according to the Associated Press. This is the government’s revised forecast, which is much more optimistic than the previous prediction of $3.95 for the summer – well below the 2008 average of $3.80 per gallon.