Fuel hikes are not the only consumer increases expected this year

Overall fuel retail sales have increased despite higher gas prices nearing $4.00 a gallon in most U.S. cities but the costs of rising paper and household products are likely to slow down consumer buying for those who purchase things like diapers, paper products and detergent.

At the start of 2011, companies from around the world reported declines in overall retail sales directly related to the rise in the cost of one barrel of oil which is now at approximately $111.00/barrel. Due to extended rising costs of fuel prices this year, other everyday necessary consumer items reached heights beyond last year’s expected inflation rises.

Although fuel retail sales have increased despite higher gas prices which have soared over $4.00 a gallon in some U.S. cities, sales for other household items may start to slow down."Whenever we pay more for gas, dollars leave this country to pay for imported oil," says Peter Morici, an economist at the University of Maryland. "That's money that could be spent on U.S. products, and in turn, it slows demand, slows growth and slows jobs creation."

Mr. Todd Litman of Victoria Transport Policy Institute www.vtpi.org wrote that “Motor vehicle fuel prices have increased significantly in recent years and are likely to stay high in the future,” based on reports from a CRS study done for Congress in 2007. Between 2003 and 2008 average U.S. gasoline retail prices more than doubled, from $1.77 to $4.10 per gallon, and high prices are expected to continue due to growing international demand and rising production costs (Jackson 2007).

P&G and other consumer products manufacturers are now handing out the results of the increase in oil prices by hiking the costs for paper, aluminum and other goods used in product manufacturing, as well as passing off higher transportation costs onto the consumer.

Larger corporations have been slowly raising shopping costs to the consumer who is trying to keep a conscientious budget in light of rising gasoline prices.

In late February, P&G said that it would raise some prices as it expected more than $1 billion in increased commodity costs this year. Diesel fuel and other corporate expenses are climbing and thus, the product price hikes are absorbing these increased costs.

“Procter & Gamble Co (PG.N) will raise detergent prices by 4.5 percent in June as the world's largest household products maker starts to respond to rising costs for materials, packaging and transportation.”

Procter & Gamble Co. said Monday it raised U.S. list prices for those products because of rising costs for pulp, oil and gas.