12 Things That Will Be More Expensive as Oil Prices Rise

xavier gallego morell / Shutterstock.com

Oil prices can sock it to you at more than just the gas pump.

After reaching $70 a barrel in January, oil prices have hovered above $60 a barrel. That’s about 50 percent higher than they were last summer and double two years ago. Prices change daily, but hitting the $80 mark by the end of the year doesn’t sound too preposterous, Yoon Chou Chong, head of Asian equities at Natixis Asset Management, told CNBC.

You feel it when you fill ‘er up, but petroleum products also go into a wide range of goods such as fertilizer, tires, plastics, skin creams, detergents and many more. Here’s a look at 13 ways higher oil prices can put you and your budget over a barrel.

1. Gasoline

Mila Supinskaya Glashchenko / Shutterstock.com

The national average price for regular gasoline lately has inched up to more than $2.65 a gallon, AAA reports. That’s pumped up around 13 percent from $2.34 a year ago. A typical 15-gallon fill-up at $2.65 a gallon will run you $39.75. That’s just almost a $5 difference from year-ago prices, but if you fill up twice a week, it’ll cost you $520 more for the year.

If gasoline reaches its record average of $4.11, seen when the economy was tanking in July 2008, filling up a 15-gallon tank will cost $61.65, about $6,400 a year for that twice-weekly stop at the pump.

2. Airfares

Alexander Tolstykh / Shutterstock.com

Rising jet fuel prices could be the wind beneath airline ticket price hikes.

Jet fuel runs around 30 percent of an airline’s cost and, coincidentally, its price is running about 30 percent higher than a year ago.

Doug Parker, chief executive officer of American Airlines, was quoted in a recent Bloomberg report as saying that fares “are too low for oil prices this high.” Carriers will find a way to pass on the increase to consumers, he said, “but it takes time.” There’s generally a gap of at least three months between when jet fuel costs climb and fare increases show up.

3. Food

Stokkete / Shutterstock.com

Whether you’re a vegan or a steak lover, increased food costs are hard to swallow. And the cost of producing food and getting it from farm to table rises when oil prices go up. From farm machinery and water pumps to nitrogen-based fertilizer, agriculture is one of the most energy-intensive industries in the world, analysts say.

For some crops like oats, corn, wheat and barley, energy and fertilizer expenditures combined make up more than half of total operating expenses, says the U.S. Energy Information Administration. Between 2001 and 2007, high oil prices added 40 percent to the cost of growing corn, wheat and soybeans, agriculture analysts say.

4. Loan rates

Lopolo / Shutterstock.com

Interest rates and oil prices tend to move together. Higher oil prices contribute to inflation, which the Federal Reserve tries to fend off with higher interest rates. So rates for car loans and mortgages often rise when oil prices do.

Rates for a typical 30-year fixed home loan are running about 4.3 percent, more than half a percentage point above last September, when they were 3.75 percent; auto loans, now around 3.4 percent, had an average rate of 2.5 percent in August 2017.

5. Metro homes

Photographee.eu / Shutterstock.com

Location, location, location! Homes in areas with longer commutes tend to sell at lower prices when gasoline goes up, while homes with shorter commutes tend to sell at higher prices, Adele Morris, a senior fellow and policy director for climate and energy economics at Brookings, recently told Business Insider.

A 10 percent increase in gas prices can mean a 2 percent price bump for homes closer to a city center, says a 2014 study by Morris and Helen Neill of the University of Nevada, Las Vegas.

6. Cars

By gpointstudio / Shutterstock.com

Rising gasoline prices drive sales of fuel-efficient cars, making deals harder to find.

Prices for compacts, compact SUV/crossovers and electric vehicles are among those rising the fastest, a Kelley Blue Book analysis shows. The estimated average transaction price for U.S. light-vehicle sales was $35,285 in March 2018, up $703, or 2 percent, from March 2017.

7. Tires

Syda Productions / Shutterstock.com

Tire prices are where the rubber meets the road, so to speak.

Oil makes up about a quarter of the cost of synthetic tires, the kind most consumers buy. Each tire takes about 7 gallons of oil to produce, according to tire makers: 5 gallons are feedstock, from which the substances that combine to form synthetic rubber are derived, and 2 gallons supply the energy necessary for the manufacturing process.

One possible pricing exception: Tire makers may hold the line if people drive less due to higher gasoline prices, and tire demand drops.

8. Oil stocks

Calin Tatu / Shutterstock.com

Rising oil prices push profits up the quickest for companies, such as ConocoPhillips, that sell crude oil, analysts say. That boost can send their stock prices up.

Oil refiners, such as Andeavor and HollyFrontier, that focus on making gasoline, diesel fuel, heating oil, jet fuel and other products rely on what’s known as the “crack spread,” the difference between what they pay for crude oil and the selling price of refined petroleum. Refiners may get squeezed by higher oil prices, limiting their profit potential and thus their stock price potential.

“Integrated majors,” or “Big Oil” companies, like ExxonMobil and Chevron, explore, produce, refine and market refined products. Generally, higher oil prices benefit Big Oil’s bottom line, analysts say.

9. Shipping

Woman shipping packages
Luis Molinero / Shutterstock.com

Shipping companies deliver higher prices when their fuel costs rise. UPS and FedEx, for example, adjust fuel surcharges for ground and air delivery services weekly, depending on diesel and jet fuel prices.

UPS, for example, raised its ground fuel surcharge to 6.5 percent in January. It was 6 percent in November 2017, and lowered to 6.25 percent in April 2018. If diesel prices nationally average $3.14 to $3.26 a gallon, UPS could boost its surcharge another half-point to 6.75 percent.

10. Furniture

Iakov Filimonov / Shutterstock.com

You might find the price of furniture growing uncomfortable.

When oil prices rise, the cost of transporting materials to furniture factories goes up, along with the costs of shipping furniture to a store or to your home.

The cost of synthetic fabrics used in furniture upholstery go up as well. Petroleum-based fibers include rayon, nylon, polyester and artificial furs.

11. Health care

Steve Cukrov / Shutterstock.com

Have you looked in your medicine cabinet lately? Aspirin, nasal decongestants, rubbing alcohol, deodorants, cough syrup, lotions, antihistamines, insect repellents, moisturizers and, of course, petroleum jelly are among the many products made in some form from ingredients derived from crude oil.

Petroleum-based plastics are found in stethoscopes, catheters, tubes, prosthetics, artificial corneas, hearing aids and pill capsules, to name a few products.

While petroleum products aren’t the biggest health care cost driver, they can make you feel sick. When crude oil prices rose just 1 percent in a month, says one U.S. study, health care costs rose 0.03 percent and remained higher for 20 months.

12. Construction

Construction worker
By Daisy Daisy / Shutterstock.com

Want to build something? Oil will be involved, which means the cost of building materials can go through the roof when oil prices spike.

Roofing, PVC, insulation, lumber, steel, aluminum and cement usually see cost increases when oil prices rise.

Even if you just want to remodel a kitchen or bathroom, not only will transporting the material cost you more, but petroleum also is likely to be part of nearly every purchase. In the kitchen the coffeepot, cooking utensils, refrigerator shelves, dish sponges, trash bags and nonstick pans are derived from petroleum products, Lubbock Online reports.

What prices have you seen go up due to rising oil prices? Share with us in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
60% of People With This Disease Don’t Know They Have It
60% of People With This Disease Don’t Know They Have It

Millions of people overlook this potentially potent condition that tends to strike women and older adults.

America’s Most Reliable Appliance Brand Is a Surprise
America’s Most Reliable Appliance Brand Is a Surprise

Have you heard of this appliance manufacturer?

7 Ways to Save Money Without Trying
7 Ways to Save Money Without Trying

Saving money doesn’t always mean drudgery and sacrifice. These tools make it easy — sometimes even fun.

11 Signs That You Chose the Wrong Place to Retire
11 Signs That You Chose the Wrong Place to Retire

Health and happiness in retirement rely on some key factors.

12 Tech Gadgets That Make Daily Life Easier
12 Tech Gadgets That Make Daily Life Easier

These products on Amazon will ease worries and simplify your routine.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

Why Your Next Stimulus Check Might Be Bigger Than You Expect
Why Your Next Stimulus Check Might Be Bigger Than You Expect

Your third coronavirus payment will be the biggest yet — and possibly even bigger than you realize.

9 Shopping Mistakes to Avoid at Costco
9 Shopping Mistakes to Avoid at Costco

Are you missing out on serious savings at your favorite warehouse club?

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

The 16 Cars Most Likely to Last 200,000 Miles
The 16 Cars Most Likely to Last 200,000 Miles

One automaker takes half the spots on a list of the longest-lasting vehicles.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

This Is the Most Dependable Car Brand in the U.S.
This Is the Most Dependable Car Brand in the U.S.

This brand’s vehicles are least likely to give drivers repair headaches, according to J.D. Power.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.