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How are you going to cope with higher gas and food prices?
The fire at the Chevron oil refinery in Contra Costa County has been contained, but consumers could soon be feeling the burn.
Analysts predict that the price of gas could rise up to 35 cents per gallon due to this setback in the refinery process. California has a special blend of gasoline which pollutes less than anything else on the market, and very few other states produce it. Distributors might have to start importing from Singapore or Australia to make up for the loss in production. This also comes on the heels of rising prices of oil, which already notched up the price of gas about six cents.
And if that weren’t enough, the Midwest is going through a drought that is having a negative impact on the growth of corn and soybeans. Thus, gas prices will be going up at the same time as food prices. Beef, pork and poultry will be the first affected by the drought, as corn is the main source of feed for most American livestock. Of course, it is also a staple in the composition and production of a staggering amount of foodstuffs, so the spike will soon be seen all across the grocery store.
Just how fragile is the infrastructure for oil and gas in this country? What effects will these trends have on the overall economy? How will you as a consumer deal with the higher prices at the pump and in the checkout line?
Tom Kloza, Chief Oil Analyst, Oil Price Information Service
Alan Bjerga, Bloomberg News Agricultural Policy reporter