11 Surprising Industries that Benefit (and Lose) from Cheap Gas
It's been many years since a tank of gas was this cheap. Great news for the average joe on the road. Many surprising industries are also benefiting from this cheap fuel boom, like America's shrimpers.
However, others are cringing as the price of a barrel drops, and we're not just talking about oil companies.
Here's a fascinating look at how many different industries are touched by the price of a gallon of fuel.
Yes, the shrimping industry is foaming at the mouth with the dip in gasoline prices. According to CBS, many shrimping vessels carry as much as 10,000 gallons of fuel on a trip. However, they are currently paying as much as 70% less for a gallon of fuel.
This could mean cheaper scampi on your plate down the road.
2. Package Delivery
Express package delivery services like UPS and Fed Ex are getting an added cushion from the dip at the pump. Fuel is the core of all their air and ground deliver, so it comes as no surprise.
However, according to the Wall Street Journal one UPS exec stated that customers will have to wait for the savings to trickle down to them, if ever.
Much like the previously mentioned industries, the airlines rely heavily on fuel to get their jobs done. In fact, it's the #1 expense of commercial airlines. That same Wall Street Journal story explains that consumers are unlikely to see a dropoff in ticket prices, though. Market volatility has proven that the price of oil may shoot back up, so the air industry is likely to wait and see if oil stays low before dropping prices.
Farmers stand to gain in major ways from this shift in oil prices. Not only will it be cheaper to operate heavy machinery and transport crops and livestock, but less visible ways, too. One would be an increased demand for corn-based ethanol to be added to the skyrocketing sales of gasoline at the pump.
According to one source, this will help pad the costly process of producing food and may eventually lower the prices of a pound of ham or green beans. But like the other industries, nobody's slashing prices just yet.
6. American Taxpayers
The biggest benefactor of all? Many agree it's the US taxpayers. According to the math, this influx of added money from saving at the pump is the equivalent of a $75-billion tax break. Much of that money is likely to go back into the economy and help businesses.
However, not everyone is so grateful for the drop in oil costs...
Some industries were actually thriving with oil prices higher and are now bracing for a serious economic blow, like the railroads.
The Wall Street Journal hinted at the tangled relationship between trains the crude oil. Yes, diesel fuel runs their huge motors, which is good, however energy-efficient freight trains were gaining some serious ground on the trucking industry as an affordable means of transportation. With trucking on easier times thanks to fuel costs, it puts a greater strain on the rails.
8. The Pipe-Making Industry
Much like how shrimping was a surprise boost industry, the nation's steel pipe and valve manufacturers are feeling a crunch. Yes,these heavy products cost less to ship thanks to gasoline prices, but now many oil companies aren't funneling as much money into their oil fields, which is where the majority of business comes from for the pipe-making industry.
They are not alone, though.
9. Chemical Manufacturers
US chemical companies have been investing billions in petrochemicals and resins based on the formerly cheaper natural gas. However, with the price of crude dropping, there is less demand for these alternatives and now puts the entire industry in a tough spot.
10. The Environment
The drop in crude oil prices have environmental scientists very worried. With lower pump costs, more people will be driving, which will have a negative impact on the environment. In addition, lower costs tend to encourage people to buy less fuel efficient automobiles. Also, it tends to have an equally negative impact on research and development for zero-emissions autos.
11. Global Economy
Many experts are predicting a global slowdown, economically. Of course, oil producing nations in the Middle East, as well as Russia, Venezuela and others are hit hardest. But others, like France and Germany are also feeling stagnant economic times with oil prices.
Clearly, the price at the pump is an exciting thing to see on a credit card statement, but it's fascinating to see the ebb and flow of different industries and how they are all tied together by crude oil.