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Time Special Issue
The lives and ideas of the world's most influential people
May 8. 2006
"Who Wins and Who Looses When Gas Prices Skyrocket?"
by Bill Saporito
The Airlines ,Chemical enterprises, and Fed Ex: Do They Need to be Subsidized by our Government?
Mr. Saporito wrote an interesting article on the whole problem that we are having with the price of gasoline escalating at such a high rate. Everyone knows about the fact that gas prices have gone up considerably and that this is diffiuclt for people who drive a lot.
Do you realise that Dow Chemical Inc.is using up 47% of its' total cost (budget) in energy and hydocrabon feedstocks, Mr. Spaporito tells us. How about this: Saporito discovered that for every one dollar increase in the price of a barrel of oil this translates to a $365 million for each of the eleven airlines? They are all going into the red; even the very efficient Jet Blue!Some of the airline companies were hoping to be breaking even this year. Now they are finding out, according to Mr. Cordle of Airline Forecasts, that they may stand to loose $3.5 billion in 2006. Cordle predicts mergers and higher fares, but will that be enough? How much of a price increase can the public carry?
Fed Ex had to go up from 12% to 13.5% . How much more can they pass along and make money?
Saporito says that even pizza delivery companies are getting worried.
He points out that the world price is being driven up beyond what we have experienced in the past due to huge demand from new industries in China and in India.
What do you think? Will we subsidise these companies in order to keep our economic health and growth as a modern society?Do you know another way to afford these increases?