Cheap Gas!!! YES? Be Careful what you wish for.
Currently unleaded fuel is around $1.61 a gallon average and crude is trading for $33,55 a barrel. Those who celebrate the cheap prices don’t see the forest for the trees.
The State of Louisiana is reporting a $500 million shortfall in their current collections and is preparing deep cuts across the board. The state of Oklahoma is estimating a $900.8 million shortfall in fiscal year 2016 forcing drastic cut backs. What cutbacks? Peoples jobs, police and fire protections in the city budgets, education from state funding and on and on and on, Cuts that personally impact every one of us. We save a buck at the pumps while we lose millions in services and see our neighbors without jobs.
Talking about jobs, just look at the headlines. Chesapeake Energy to layoff 740, 526 in Oklahoma. Halliburton, Chevron, Shell, Eaton and on and on and on. Layoffs, people who are unemployed not paying taxes while receiving unemployment.
There is a trickle down to all of this. Banks are prepossessing hundreds of vehicles and equipment from oil companies unable to pay. One Oklahoma car dealer that sells to the oil industry reports sales down 50% the past 12 months. Banks are forced to repossess and take huge losses on equipment that there is no one to buy. It trickles down to all the retailers whose customers are now on tight budgets until jobs return.
It impacts the entire country. Energy is the third largest industry in the US economy. When energy hurts, America hurts.
It has impacted us at Ebsco. Although we have a diverse customer base, energy is still an important component. We have painfully been forced into layoffs and cutbacks this last year. We tightly control our budgets and spend only what is necessary. That’s money that isn’t going into the economy.
So the next time you celebrate cheap prices at the pump, think about your neighbor that just got laid off or took a 30% pay cut. Think about the retailers closing up due to lack of customers. think about your school budgets, fire and police budgets being cut.
See the forest and you may not be so excited by those cheap fuel prices.
I personally would like to see oil back to $75 a barrel. I’ll pay the extra buck at the pump to be able to rehire those people.