Gas prices hit an annual high this past Labor Day as refineries work to get back up and running after shutting down due to Hurricane Harvey. On Monday, the nationwide average for gas was $2.64, almost 20 cents higher that the average of $2.45 seen the previous Thursday. A report from The Energy Department stated that 8 refineries in the Corpus Christi and Houston are working on getting started after the shut down, and 4 in the gulf are working at reduced levels. The drop in supply is causing a rise for demand for gas, making it an opportune time for oil producers to raise prices, but when fuel prices rise, so do the prices for many other goods and services in our economy.
Every sector of the economy need fuel to operate. Transportation cost alone account for 10% of all revenues in the US, and last week 22% of the oil coming in from the gulf was shut down due to Hurricane Harvey. The expected spike in gas that followed will start to affect the price of many goods and services across the US. Many businesses that need some sort of transportation to operate will raise prices to keep profit margins steady. And prices are expected to rise even more with Hurricane Irma on the horizon. So how will your business react to the rising prices in oil? Will you raise prices, cut cost, or a mixture of both?