If you have put gas in your car lately, you have no doubt noticed that it takes a lot less money to fill up the tank than it did a few months ago. Gas prices around town have fallen below $2.00 per gallon at most stations. The lower prices are the result of a drop in the price of crude oil, which is around $40 a barrel, or less than half of what it was 15 months ago. While this drop in gas prices is a welcome relief to teenagers and other consumers when they pay up at the pump, the impact on our economy as a whole, especially in the state of Texas, might not be welcomed so warmly.

It seems that everyone in Texas is involved in the oil and gas business, whether they know it or not. This means that the oil and gas business is so important to the Texas economy that it affects almost everyone when the industry goes up or down. For example, when oil prices are up and business is good. The oil industry keeps a lot of people busy–such as companies that drill wells and provide other services directly to the industry. But the rest of the economy feels the effect as well. People in the oil business spend more money on new cars, new houses, new clothes and other luxuries. This means that automobile dealerships, home builders, clothing stores and other luxury businesses make more money. When the owners of those businesses make more money, they, in turn, spend more money, and the economy as a whole is stronger. On the other hand, when oil prices fall and business dries up, the same effect is felt in reverse. People lose jobs, companies go out of business and spending as a whole is reduced.

The reason why the price of gas was rising for quite a while was due to the fact that the demand for oil is higher, and this nonrenewable resource is very limited. While it would be easy to dance with glee over cheap gas prices, there could be vast consequences for these changes. While nobody wants to pay more for gasoline when they fill up their cars, those high prices help a lot of people in our community earn a nice living. In addition to the people mentioned earlier, lawyers, investment bankers and commercial real estate brokers are just some of the people who make money when oil and gas is strong.

So–will these low prices last? Some experts predict that low oil prices will continue into next year, which will keep gas prices low. However, with all the instability in the world, especially in the Middle East, where much of the world’s oil is produced, there is a good chance that prices could rise rapidly. People might save some cash now, but it will be interesting to see how it plays out when people start complaining.