As the price of oil goes down, will the price of other things go down as well?

We started paying more for electricity, gas and all food stuffs because of the price of fuel. Is it reasonable to expect these prices to come back down, now that gas is coming down?

2 Responses to “As the price of oil goes down, will the price of other things go down as well?”

  1. ibu guru Says:

    Oil prices remain substantially above where they were a year or two ago. We are not back to $40/bbl oil and it is highly unlikely that we will. Other costs remain high or are increasing — e.g. the cost of credit, which is very difficult to obtain and can be quite costly despite lowering interest rates on funds loaned to banks.

    Prices will come down on things where demand drops. Reducing shipping/transport costs will at least moderate pressures to increase prices on foods & things trucked/shipped longer distances.

    Where demand remains high, however, prices can remain high and even increase. Population continues to increase, so there’s ever more pressure on food supplies and other basic needs. When people decide to reduce the number of children they have, then some of the pressure comes off; however, desires for more, better & more varied foods continues to increase even if population decreases sharply.

  2. Jackie Says:

    That is a very good question and a catch 22. I would say prices will not go down because of the economy crisis and for the fact that financing is unavailable to most including businesses so they cannot afford to lower prices. However citizens cannot afford to pay the high prices for the same reasons. I guess that could be the very definition of recession or depression. However one may view it.