What the Future Holds If Gas Goes to $10 a Gallon

Will America finally get on the alternative-fuel wagon when gas skyrockets to $10 a gallon, as some predict? Just maybe it’ll change our viewpoint on hybrid and electric cars, solar energy, green living and shopping online.

Or maybe we’ll all get bicycles and begin using public transportation.

Whatever changes in consumer behavior we may see, there’s sure to be a corresponding price increase in in everything from food to air travel to plastics.

Prices have already taken a healthy jump in the last four years, as U.S. gas prices have doubled to an average $3.14, aka Pi. Recent political unease in the Mideast is only making things worse. Adjusting for inflation, that $3.14 is higher than during the 1978 to 1983 oil shock that triggered the last recession. Since we’re already in the middle of a recession, it’s difficult to foresee how things could get worse. Still, we’ll try our hand at a few predictions. Here are nine retail impacts we see in our crystal ball.

1. Trucking
Thousands of truckers could go bankrupt as desire for their services takes a steep dive and train transport retakes the day.

2. Plastics
Plastics for everything from appliances to pacemakers would jump in price as the natural gas from which plastic is made rises in value. Stores will start charging for plastic bags and plastic water bottles will become things of the past.

As a result, glass and metal will become popular again while recycling will explode. You may just end up with nine recycling bins to separate your trash, as they do in Japan.

3. Eating Out
A Nielsen study found 41 percent of consumers already are eating out less. When gas hits $10, restaurants will experience a double whammy as food prices skyrocket while consumers cut back even further. Chains will likely survive, but little mom-and-pop operations will go under.

4. Free Shipping
UPS already knows what would be next: fuel surcharges. The ground-transportation company used them in 2008 and, if diesel were to hit $10 a gallon, a package that previously cost $100 to ship would cost $120 to $130.

That would make free shipping offers all the more attractive to consumers. Heck, Free Shipping Day, scheduled this year for Dec. 16, could become an international holiday. Who’ll be able to resist skipping holiday mall visits to shop online with free shipping deals and guaranteed delivery by Christmas Eve?

5. Gassing Up Our Vehicles
According to consumer researcher Nielsen, the average family’s gas price would leap from 16 percent of its retail spending to about 40 percent. Let’s say you travel 100 miles per week and your car’s mpg is 25; Your bill will go from $693 per year to $2,080. Filling a Honda Civic would set you back $135 while a gas-guzzling Ford Explorer would cost $225 per tank.

6. Public Transportation
Will governments finally start investing in long-promised light rail? One thing is sure; Car pooling will become a hot fad as commuters double, triple and quadruple up. On the plus side, you’ll finally be able to use those HOV lanes.

7. Vacations
You think “staycations” are popular now. Prepare for holidays spent busing to the city museum or biking to picnics (if you can afford the food).

8. Food
Food prices are already expected to increase by 3 to 5 percent this year and grocery stores are already passing much of that extra cost onto consumers. Expect a minimum of a 25- to 30-percent increase when gas hits $10, particularly on perishables that eat most heavily into a store’s 2.5-percent profit margin. Even Cornflakes will go through the roof because about 80 cents of the $4.50 retail price goes towards transport.

9. Air Travel
Already socking consumers for nearly innumerable add-on fees, airlines will undoubtedly put the pedal to the metal on fuel surcharges. Back in 2008, oil rose to $145 a barrel and we began to see fees for checked baggage, drinks, meals, pillows and even extra leg room.

Airlines already began announcing more fare increases in late February and experts say ticket prices could triple, meaning Americans will simply stop traveling by air. Could Amtrak make a major comeback?

Sound pretty grim? What changes will you make as gas prices spiral upwards?

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