Gas Prices Drop In Indianapolis (Chapter 11 Blog)

Link: http://www.indystar.com/apps/pbcs.dll/article?AID=/20081008/NEWS/810080383/1003/BUSINESS

Summary: The massive increase in price for gas has effected hundreds of millions of people since it started it's rocketing prices in June. The highest point that the gallon price marked in Indianapolis was in the $4.10 range, an appaling difference from the same time a year before, when the price of a gallon was just $2.67. Throughout the United States oil prices dropped slightly on Tuesday, standing at $89 per barrel for the rest of the day. But the price has fallen considerably it's peak of $147 a barrel during July this year. On Tuesday while filling up on gas at Wal-Mart in Avon, Richard Abraham stated "it's about time the price of gasoline reflected that drop". The current price is $3.04, a giant drop from the $4.10 in July.

Connections: This story on the gas price decrease relates to Chapter 11. My reason for believing this is because gas impacts a company's "Automobile Expense", which can end up being a major expense if there is a large number of deliveries or transportation involved. Since Automobile Expenses falls into the Operating Expenses area, the higher it is, the less profit a business earns. During the summer, many businesses have been damaged by high gas prices, which eventually leads to lower Net Income, or possibly Net Loss. Some Businesses that would be greatly impacted by high gas prices would probably be UPS, FedEx, Taxi Companies, and other Delivery Services.

Reflection: During my read on this article on gas prices, i realized that there must be a benefit for the increased cost of gas, as well as a loss. Since gas is a natural resource and we only have a limited amount before it's all gone, it is good that prices went up, because it will give people insight on how they should save gas. Before, maybe someone made 2 trips for grocery shopping, but while gas prices were rocketing, they might have only made 1 trip because they realized that saving gas means saving money. I only hope that people will keep trying to save gas, even though the price of it is dropping.