Soaring energy prices bad news for the economy
The high cost of oil and gasoline could act as a tax on consumers and undercut the government's stimulus plan.
Once again, concern is rising about the price of oil and gasoline.
On Tuesday, the price of oil hit a record $100.01 a barrel, up some $14 in eight trading days. It's the second time since late December that the price has hovered at the $100-a-barrel level.
The sharp rise is already showing up at the gas pump: Between Tuesday and Wednesday, the price of gasoline rose 4 cents a gallon, reports GasPriceWatch.com. Since Feb. 9, gasoline prices nationally are up 10 cents a gallon, for an average price of $3.05 a gallon.
For the economy, the run-up could not come at a worse time. Many economists believe the US economy is teetering on the edge of a recession. Higher energy prices act as a tax on consumers, absorbing money that would normally be used to buy other things.
If energy prices remain this high – or go higher – they could begin to eat into the rebate checks that the government is planning to start sending taxpayers in May.
Motorists are paying much higher prices than they were a year ago. According to GasPriceWatch.com, gasoline prices are up 51 cents a gallon from a year ago, when the price of oil was closer to $60 a barrel.
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