If you thought you were getting whacked hard at the gas pump, just wait. Because before long, the price of lettuce, cucumbers and even baby shampoo is likely to skyrocket. ”Transportation costs are going up and they are going to be reflected in the supermarketanything that is coming in by truck,” said Glenworth A. Ramsay, an economics professor at the University of Rhode Island.
Ramsay expects that the price spikes at the local market will happen rather quickly. And that’s just the beginning of the bad news.
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Because the cost of crude oil as a raw material is also soaring, companies that use it eventually will be passing along the increased costs they are incurring, Ramsay said. That means plastics, synthetics and much more.
Because plastic products, for example, do not fluctuate in price on a week to week basis, many large manufacturers may show a certain degree of patience. But that won’t last long, Ramsay said.
“By the summer, if we haven’t seen a substantial rollback in the price of crude, then we’re going to see an increase,” he said. “These companies are willing to take a profit squeeze for a brief period of time, but by the summer they are going to be tired of that.”
Anita San Antonio, executive director of the Rhode Island Food Dealers Association, said her constituents — the state’s grocers, dealers and wholesalers — face a series of difficult decisions. For example, how long do they stay loyal to long-time suppliers and when do price hikes get passed on to the consumer?
“If our suppliers’ prices go up, then our prices will go up,” San Antonio said. “The people I have talked to have said they are just starting to see the prices go up. It’s a tough decision.”
At URI, Ramsay sees a history lesson in the making.
“This is what happened in 1973 and 1974,” Ramsay said.
Then, as now, the oil-exporting nations, known as OPEC acting in concert forced the price of crude oil up and reduced the supply available, resulting in long gasoline lines and an inflated American economy.
“We are going to learn how much of our economy is actually dependent upon oil.”
