In current months, oil prices have skyrocketed to $85 a barrel. This has resulted in the price of Gasoline rising above $1.50 a litre. This increase has been blamed on the recent hurricanes in the Gulf of Mexico and the resulting production delays. Gasoline prices have risen 30% this year; the cost of Gasoline being a major expense for most families.(see also how to make better budgeting)
Apart from the direct effect we have already experienced, we will soon begin to suffer the flow on effects of the Gasoline hike. The cost of milk has already increased and a range of other industries such as transport, storage, forestry, fishing, agriculture and meat and all dairy products will have their costs increase due to the rising price of Gasoline. If you think about it, there are few goods and services in the economy that don’t have fuel costs somewhere in their production and distribution chain.
The good news is that many experts believe that this spike in Gasoline prices is temporary. It is a result of diminished production, due to natural disasters. Eventually, the damage will be repaired, supply will return to normal levels and the price will drop. However, that could be six months or a year from now and until then you need to keep paying for the Gasoline, pay your bills, budget for Christmas and pay your mortgage.
If rising costs are getting on top of you, perhaps refinancing is the solution. You can roll all your debts into your home loan; car payments, credit cards etc., consolidating your debt and reducing your regular repayments, leaving more cash each week to combat this sudden increase in expenses. Instead of running up the credit cards, refinancing your home loan may be the most cost-effective and cheapest way to raise that extra money to help you through the next turbulent 6-12 months.