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Oil Price Spike Drives Up Other Costs


Rising fuel costs are making it more expensive to move food and other goods to the marketplace. That means prices are going up for consumers, but incomes may not be rising enough to keep pace with inflation. As VOA's Kent Klein reports, it also means hardship for business people whose profits may not cover the increased costs. (Part 3 of 5)

Every few days, Reuben Dubene leaves his home in Free State, South Africa. He hauls loads throughout South Africa, Swaziland, Lesotho and Zimbabwe. He has been doing this job, sleeping in his truck, for more than 20 years. He has survived that and even a hijacking and a shooting. But he fears the high price of fuel could drive him out of business. His salary has not kept up.

Dubene says soaring fuel costs are making it impossible for him to save.

Reuben Dubene is not alone. People worldwide are dealing with the rising cost of fuel and, because it has to be transported, food too. Deliveries of items like fertilizer make it more expensive for farmers to grow their crops. And that extra cost is passed on to the consumer.

Farmers, truckers and other people around the world have taken to the streets in recent months to protest high fuel costs - in France, India, in Nepal, to mention a few.

Bettina Luescher is with the U.N. World Food Program. She says the spike in food prices has led to concerns about political stability. "We have seen riots in some 30 countries around the world, the protests where people really went into the streets and protested because they could not afford the flour anymore and the rice and the maize and the corn," said Luescher. "And I think that is what is concerning so many government leaders."

Many people the world over are concerned about how rising fuel prices are driving up the cost of food and other necessities.

In Dakar, Senegal, businessman Aliou Dia buys bread every morning. He says ten years ago, one baguette cost ten cents. Now it costs more than 40 cents. He says breakfast for his extended family of nine used to cost about $1, but now it is $4.

A 100-kilogram bag of rice cost $5 several years ago. Now he is lucky if he can find a bag half that size for under $40.

Here in the United States, immigrants have been hit especially hard by rising prices. Many Latin American immigrants send money home to their relatives. But statistics from the Inter-American Development Bank show the percentage who do so is down.

Miami construction worker Manuel Pascual says he spends $50 a month on fuel to drive between home and work. That makes it difficult to send money to his family in Honduras. He says he can not help his family as much as before.

The high price of fuel is even a problem in Iraq, home of the world's fourth-largest oil reserves. In the Kurdistan region of northern Iraq, anyone with a car can buy government-subsidized gasoline at a discount. But the fuel is poor quality, and the supply is limited. Many drivers buy black market fuel at roadside stands, or they pay three times the subsidized rate for better gasoline at private stations.

Ismail is a taxi driver in Irbil. He says his share of government fuel is only 40 liters per week, and the quality is bad. He buys more expensive gasoline at a private station. And that forces him to raise his fare. Which makes it difficult for poor people to afford a ride in his taxi.

Survival for Ismail and other small business people all over the world who depend on fuel has become more difficult.

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