What does the future hold as far as the local economy goes? Your guess is as good as mine.
Over the last few weeks we’ve seen oil prices drop to below $55 a barrel on world markets.
Amazingly, earlier in the year oil was flirting with the $100 bbl mark. Locally, the cost of gasoline has fallen dramatically, too. We were paying as much as $3.59 a gallon just a few months ago. Now, gas can be purchased for around $2.22 per gallon for 87 grade in Hazlehurst.
Those numbers represent two sides of a double-edged sword, and might seem a little deceiving. Oil, for better or for worse, is the backbone of our economy. Everybody in business needs it to survive, whether in the form of fuel or any of the myriad products that can be derived or created from it. We as consumers use it everyday, whether we crank our vehicles or not. Oil is everywhere.
So, lower oil prices mean that the cost of goods that are made from it and the cost of transporting those goods to market will also be lower, right? Consumers, many of whom are already living at the margin, save at the pump and in the market place, right? We cheer because gas prices are falling, putting more money into our pocketbooks for other purchases or savings or whatever, right?
The situation is not quite that simple, however. For the past few years, oil prices (and prices for other commodities) have been closely tied to the economy–more specifically, the global economy. Some geopolitical variables are factored into it, but as oil goes, the economy goes.
This is as simple as I can put it and understand it myself: Booming economy leads to higher oil prices. Higher oil prices lead to bigger profits for the oil companies. Those companies are going to pay workers more and invest much of that profit in expansion, adding jobs and infrastructure. Those investments trickle down to small towns, like Hazlehurst, Wesson, Crystal Springs and Georgetown. In turn, more people are working, more goods and services are being purchased and more tax dollars flow into the coffers of the municipalities. Everyone, it seems, stand to benefit from higher oil prices.
So, the next time a gallon of gas hits $3 or more, just hold your nose at the pump, for good times are at hand.