Rising Oil Prices Troubles Retailers

As the cost of crude inches up, the average price of gas soars toward $3 per gallon.

May 10, 2018

HUDSON VALLEY, N.Y. – Jerry Flory, co-owner of the Flory’s convenience store chain, is bracing for another round of customer complaints as the price of oil rises, The News International reports. “People are just lashing out,” Flory said. “I always sympathize with our customers because they travel, and it puts a hurt on their pocketbooks. When they’re putting kids through college and they need the money, it’s difficult.”

The average cost for a gallon of gas in New York hovers to just under $3, with more increases to come. Brent crude oil reached $75 a barrel this week for the first time in four years. “We are starting into another oil price shock,” said energy economist Philip Verleger. “If prices go above $100 a barrel, the likelihood of a recession increases significantly.”

“The $20 that used to pay for breakfast and a fill-up now just pays for a fill-up,” said Jeff Lenard with NACS. “It can get very frustrating for people, because gasoline prices are something they can’t do anything about.”

Uncertainty about Iran and other oil-producing areas coupled with trucker shortages are straining supplies. Some producers worry that a return to high prices will loosen demand and drive more people to alternative forms of energy, such as electric vehicles. 

Meanwhile, Flory, like other retailers, keeps an eagle eye on gas prices. “Every time you have a gas price scare like this, more people buy electric cars,” he said. “And that’s just not good for business.”