Oil & Price Inflation
However, there are other factors that are more influential than gas prices in driving inflationary expectations and other factors are also more influential than inflationary expectations in driving future price inflation, making that link relatively weak.
On the other hand, higher cost of energy and transportation is something which will increase the cost of production of other goods and services, something which will cause future price increases for other goods and services (this is why "core" inflation is a lagging indicator of inflation).
It could by the way be noted that oil is hardly the only commodity that have increased in price. Though commodity prices fell back slightly today (January 7) they have recently been making new post-financial crisis highs even in U.S. dollar terms and even more so in terms of other currencies such as the euro, the yen and the U.S. pound. While base effects have started (and will continue to) to reduce the annual increase, the absolute level keeps rising and the annual increases in the broader commodity price indexes are still very high (22 to 45%).
Price inflation will therefore remain elevated in the near future and will in fact at least outside the U.S. (where the stronger dollar will limit increases in the inflation rate) continue to increase.