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Rising gas costs taking toll on local businesses

By Ed Brock

Those ever-rising gas prices might be leading to unexpectedly higher costs for things like, say, flowers.

"Some months back we did raise all our delivery prices when the gas prices first started going up," said Kathryn Wood, part owner of Rex Florist.

Some of her customers act surprised to hear that they charge for deliveries, Wood said, but she'd like to know where she could get gas for free.

"Now it costs us over $60 just to fill our delivery van once," said Wood, who is moving her business to McDonough next month.

The price of gas has gone as high as $2.59 for a gallon of regular at many Atlanta area gas stations in the last two weeks, up from about $2.26 a gallon last month, the latter price being provided by the AAA Autoclub South Web site.

"Price increases were anticipated due to the near record price of crude oil and the temporary closure of oil rigs, shipping and refineries along the gulf coast as Hurricane Dennis affected the area last week," said AAA spokesman Randy Bly on the Web site last month. "Tremendous domestic and global demand for crude oil, U.S. refineries operating at near capacity and traders' concerns about an active hurricane season in the gulf continue to set the stage for greater price volatility in the gasoline market."

Ric Cobb with the Georgia Petroleum Council also said that weather in the Gulf of Mexico might have an impact on prices.

"Our shipping goes through that area," Cobb said.

Also, Cobb cited continuing increases in demand world wide, particularly in China, for the rising gas prices. A recent oil refinery fire in Texas has also stressed the system, leaving it vulnerable to any other disruptions around the country.

There are also political reasons, like the tension surrounding Iran's possible pursuit of nuclear weapons.

"It just makes the system nervous," Cobb said.

The same could be said about the ongoing war in Iraq, but the war hasn't really had a direct impact on the price of oil.

"The U.S. was getting virtually nothing from Iraq before the war ï ¿ ½ so we're not really counting on that," Cobb said.

Pricey gas has already impacted other markets beside the floral delivery business.

Several airlines, including Delta, have increased their ticket prices due, in part at least, to higher fuel costs.

And almost every business depends on trucks to deliver products, and the trucking business is starting to feel the pinch.

Bennett International Group, which has trucks based in McDonough, delivers mobile homes and other equipment. Jackie Williams is the Fuel Tax supervisor for the company, and she said every three months the International Fuel Tax Agreement Program sends the tax rate for surrounding states and Canada.

Some states have cheaper taxes than others, so in times like this Bennett drivers buy their gas in the cheap states, Williams said. And since the tax rates remain the same for three-month periods, temporary fluctuations don't affect them much.

"If it keeps going up they're going to pay more," Williams said.

Retail giant Wal-Mart has the advantage of owning its own fleet of trucks, company spokesman Marty Heires said, but they aren't immune from the gas pump blues.

"It is putting some pressures on the cost side," Heires said.

Prices at Wal-Mart stores aren't increasing much yet, Heires said, but higher gas prices do "make it difficult for us to hold the line."

There is another issue that holds Cobb's interest. Before prices hit $2 a gallon there was a lot of talk about how reaching that mark might affect Americans' driving habits. He doesn't know if prices will reach $3 a gallon this summer, but Cobb wonders if that will be the magic number.

"Right now it doesn't appear that demand for product is slowing down," Cobb said.