Monday, March 11, 2013

So what if oil price skyrockets if you can just walk or bicycle to work? Well, it turns out that out of 20 million barrels of oil United States imports every day, only 45% is used for gasoline fuel.
Though the large majority of the rest are used as fuel of some sort (like heating fuel), a portion of the petroleum is used for raw materials found in practically all consumer products sold today:
No business in America produces more of the oil-based ingredients that go into the nation’s products than the Dow Chemical Company, based in Midland, Mich. From Dow’s petrochemical operations come the basic ingredients of a wide variety of plastic bottles and packaging, including numerous containers once made of glass or tin.
Indeed, paint, computer and television screens, mobile phones, light bulbs, cushions, paper, mattresses, car seats, carpets, steering wheels and polyesters are all made with ingredients that Dow and other chemical companies refine from oil and natural gas.
Dow normally raises prices piecemeal. Last month, though, the surge in the cost of oil and natural gas, the company’s principal raw materials, produced a rare across-the-board price increase of as much as 20 percent. (Source)
So far, worried by the weak economy, many businesses have not passed along the rising cost of raw material to consumers. A growing number of economists, however, think that it's just a matter of time before they have to.    
Information found at