In the last few months we have seen a sharp increase in the price of oil. This has caused many to search for ways to save money on gas – from driving less to finding cheaper gas! However, higher energy prices are not a universally negative situation, and there are some who actually welcome the increase due to the many benefits of higher gas prices.

The Benefits Of Higher Gas Prices

Changes In Consumer Behavior

Most of us simply drive along to and from work, church, grocery stores, events, friends’ homes, and anywhere else that we feel like going. It isn’t until gas prices begin to skyrocket that we began to consider our actions. As with pretty much every other good or service, higher prices leads to lower demand.

Whenever we see a rapid surge in gas prices, we tend to see a lot more people carpooling (even posting ads on Craigslist); the sale of fuel-efficient vehicles rise, and people even consider public transportation. Some even begin to wonder if their car is a luxury or necessity!

Employers even start to offer telecommuting (working from home) as a perk to many employees – or as a way to show employee appreciation.

Also, when more of our income is devoted to gas and energy costs, we tend to cut back on more frivolous activities. This sudden burst of financial responsibility can definitely be seen as one of the benefits of higher gas prices!

New Technology Seems More Affordable

There are alternative sources of energy available to us today. However, they typically are more expensive to produce and access than oil. This means that when oil/gas prices are cheap, no one gives a second thought to these other sources of energy. However, once oil prices begin to soar, it becomes much easier for proponents of alternatives energy sources (and their respective industries) to be taken seriously.

This goes for alternative energy sources, such as solar power for houses and corporate buildings, wind and hydro-electric power for small communities, and even electric hybrid vehicles. Also, we must consider research and development of alternative fuel sources – such as ethanol from sugar cane or corn – as another benefit of higher gas prices.

This doesn’t even take into consideration all of the oil that is used to make various plastics, medicine, clothing, and fertilizer! When the price of oil rises, research into alternative inputs for the manufacturing of these items increases along with it!

Certain Industries Will Take Off

Many industries hate seeing higher oil prices, as it makes their cost of doing business that much higher. It gets more expensive to make certain materials, ship intermediate and finished good, travel to meetings, and many other aspects of business. Workers begin to demand more money in order to offset their own increased cost of living as well.

However, there are some industries that thrive when oil prices shoot up! With more expensive oil, you will have an increased interest in surveying, drilling and extracting, transporting, and refining the costly energy source!

Not only will these companies and their suppliers see good times, but higher prices should mean a lot more jobs are created within these sectors as well! Another group that benefits from higher gas prices are the shareholders in these various companies.

Higher Tax Revenue

In thinking of the benefits of higher gas prices, we can’t forget our dear old uncle Sam. Every time a gallon of gas is sold, a portion of that price goes to our government in the form of taxes. The more that is collected in the form of gasoline tax, the less tax help is needed from other areas!

photo by nuttakit

Reader Questions

1. Have you changed your behavior since oil prices have increased?
2. Do you work in an industry that benefits from higher gas prices?

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