Impact of Gas Prices on Consumer Sales

Gas prices are a reason consumers choose a certain retailer over another. This is because these prices reflect on the budgeting of an individual. In the case when the prices are too high, consumers may find measures of increasing fuel economy. This may include less usage of their motor vehicles and use of public means of transport to commute from one place to another. Another measure that consumers can take is the buying of more fuel efficient vehicles in the event of higher fuel prices. In the case of lower fuel prices, consumers are more extravagant at the pump and may even buy less fuel efficient vehicles due to the low price of gas.

The Relationship Gas Prices Have on Consumer Sales

In the case of increased gas prices, filling at the gas pump becomes more expensive and, as a result, shoppers are left with less to spend on other things. High gas prices or even low gas prices have an effect on the overall economy. When the prices of gas go up, retailers are forced to pass on the burden of increased shipping costs to the consumers by raising the cost of goods. Shoppers will, therefore, drive less so that they can be able to afford other goods and services. Increased fuel prices cause a sudden increase in the ridership in public transport. This is because most of these people live on tight budgets and have to do away with the buying of gas so as to buy other important things (Folger).

The sale of vehicles may also be affected by the price of fuel. Consumers may result in buying a particular type of a car due to the fuel cost of the day. This is because most people are willing to buy a good car despite it being a fuel guzzler.

In this chart from Wards Auto showing car sales in 2011, over the months, it is visible that the cost of fuel directly affects the type of vehicle sales. In general, all types of vehicles will be sold all year round. At one point, when fuel prices are low, most people will result in buying trucks, and as the fuel prices go up, the number of truck sales decreases. On the other hand, as the fuel prices decline, fewer people buy cars, and as they increase, there is a surge in the number of car sales (Drivingfueleconomy.com).

Recently, when fuel prices hit a five-year low, the vehicles sold in December 2015 hit a 3 percent low in the average fuel economy. This is because consumers bought new vehicles considering their current fuel prices and less concern about the costs in future. Therefore, public attention on the falling gas prices results to the buying of automobiles with fewer fuel economies (Young).

Gas prices, therefore, have an effect on the consumer sales and the economy at large. Volatile gas prices make it hard to budget since fuel costs reflect directly almost on every product we buy today. This does fuel prices such an important part of the economy. Without steady fuel prices, businesses have a hard time in the allocation of working capital and budgeting. In general, volatility of gas prices has led to the growth of the hybrid vehicle industry as an alternative for vehicle depending solely on gas. Using of fuel efficient vehicles is also a counteractive measure in the case of high fuel prices.