Dropping Gas Prices Means Dropping Food and Airfare, Right? No. - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

Dropping Gas Prices Means Dropping Food and Airfare, Right? No.

Dr. Duane Rosa, WT Economics Professor Dr. Duane Rosa, WT Economics Professor

It's the biggest gasoline price decline on record... Gas fell an average of 33 cents in just one week. But the drastic drop in gas prices leads many to wonder if other things in our daily lives will start to cost less too.

It's a simple law of nature... What goes up, must come down. But, as we'll see in this week's ConsumerWatch 10, it's apparently not a law of economics.. In this case, what goes up, stays up. Recall the scene just five months ago... Oil was at an all time high and industries like airlines and food raised prices to compensate. Fast forward to today.... Oil closed at just under $79 a barrel, but those high prices aren't following suit. In fact, not only are they not dropping, but, "Food prices are actually going up," says WT Economics Professor Dr. Duane Rosa. Like most things these days, it's can be traced back to Wall Street. "Producers and suppliers are having to cut back their employment, so that's gonna raise the costs."

An apple a day may keep the doctor away, but doing it isn't going to be cheap. "Any type of produce that comes to market on a regular basis is going to be more impacted." Pain at the pump is now taking on a whole new meaning for the airline industry... Most of them lock in part of their oil at a certain rate, as an insurance policy of sorts, so they aren't hit with a huge bill every time they fill up. But, as Delta Airlines tells us, with gas prices dropping, their locked in rates are actually higher than current rates, which means in some cases, they're losing money. Keep in mind... We're calling today's oil prices low, but fuel is still about 65% higher than it was two years ago.

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