$143 for a Barrel of Oil

30 06 2008

The cost for a barrel of oil reached a record level of $143 today (30 June). The direct implication of this is likely to be a rise in prices of petrol and diesel. But it is not only the motorists who are going to be affected, everyone will be affected either directly or indirectly. For example, consumers are already beginning to feel the pinch as prices of day to day items such as bread, eggs, cooking oil, etc are beginning to rise. There are different reasons of this inflation in prices of which one is the rise in fuel prices. The rise in fuel prices leads to an increase in transportation costs which is added to the price of the goods and unfortunately passed on to the consumer.

It is no surprise then that last week, discount stores Aldi and Lidl announced substantial growth in like for like sales. The weekend saw a “price war” between Tesco and Asda as they tried to lend a helping hand and attract consumers already struggling with rising fuel prices and energy bills by slashing prices of everyday items by as much as 50 percent in some cases. Consumers are increasingly beginning to shop around with some using price comparison sites like mySupermarket.co.uk looking for better deals rather than just relying on one retailer. Other retailers like Sainsbury and Morrisons are also reducing prices and might also be forced to join the war by reducing prices in order to retain their customers.

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