Fuel Prices

The price of crude oil is now over $100 a barrel, so fuel prices are climbing again. This time it’s petro-politics.

Iran has halted oil sales to France (who buys almost no Iranian crude) and Britain (who buys none at all) and has threatened to halt oil sales to other European Union nations. This is because the EU has announced a plan to stop buying Iranian crude in an effort to convince Iran to halt their nuclear program.

If the Europeans are already planning to stop buying Iranian crude, why should Iran’s threat to stop selling it to them raise oil prices everywhere in the world? I don’t know, but it shows how unpredictably fragile our lifestyle here in the U.S. can be.

Here’s a more predictable reality: If you’ve got it, a truck brought it. In fact, no matter what vehicle moves it, everything in the world that is moved from one place to another is moved by power derived from oil, including oil itself, so even a modest increase in the price of fuel is multiplied in every product’s journey from raw material to your hands.

OK, so rising fuel prices raises the price of everything and we’ll all feel the pinch, but how much you feel it depends on your point of view. How much more will you pay for an impact wrench because your tool man’s monthly fuel bill has gone up 25 percent? How much less will the tool man bring home anyway? How much will your own business suffer because even your loyal customers will drive less and therefore need service less often?

From the fuel shortages of the 1970s to the price spikes of just two years ago, we’ve been through this several times. It will hurt some more than others, but some things will change for the better; who could have imagined the speed and precision we get from our tools today? Who knows what kind of innovation will be spawned by 5-dollar-a-gallon fuel? The fact is, the price of mobility in all its forms has always been an expense for all, and most of the people working in this industry will figure out how to make a profit anyway.