Price increases for Cheese, Margarine, Mayo, and Gasoline

If the price of oil wasn’t rising all over the globe I would say you have a reasonable point, but they way things are going now, it’s just not true. The reason all companies are raising prices is because they don’t have direct access to the oil. The government serves as the middleman to purchase oil at free market prices (which are increasing – as of today 158.987295 per liter). The government can raise and lower the taxes on oil but if the tax rate has stayed the same, they’re not pocketing the difference.

If you really want to focus your attention on something, you should be looking at why these oil prices continue to rise. Demand isn’t increasing, supply isn’t decreasing, and the production supply has not been disrupted at all.

Government, as corrupt as it may be, risks high levels of anger and discontent when they start raising basic food prices. Cars are seen as a choice and those who choose to drive see paying more for gas as inevitable. Food on the other hand is seen as a necessity and higher prices are seen as the fault of the current administration – which is what any politician wants to avoid.

Can’t argue with that.

But the government can’t also stop buying oil so if they decided not to raise prices on the oil itself, they would lose money on the sale of the oil and the deficit increases (which means the tax payers hurt more).

Or they can pass the price increases onto the people buying the oil, the companies, and then in turn have the companies charge more for their products (which means the consumers, the tax payers, hurt more).

Either way, the rising cost of oil is definitely at the root of this problem, and even if companies could buy oil directly from the source, the free market price is so high at this point that they wouldn’t be saving any money there.