Rising gas prices: Retailers feel pain, too

The price at the pump keeps rising.

The national average Thursday was $3.23, according to AAA, and in Atlanta it was $3.15. Both prices were up 4 cents from the previous day.

Pump prices haven't been this high in two years. Atlantans are still paying far less than the record average price here of $4.11 on Sept. 16, 2008.

But some experts speculate that prices could reach that level again this summer, and others say it could go even higher.

If that happens, it could put the skids on spending.

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"Gas has a way of, unfortunately, dragging the economy down," said Jim Tudor, president of the Georgia Association of Convenience Stores.

People tend to blame the gas stations when prices rise, but Tudor said they get squeezed by rising prices, too.

They operate on slim margins, and typically roll the money from the preceding days' gasoline sales into the purchase of the next shipment of gas, he said. That's great when prices are falling, but when they rise it makes it difficult to bankroll the next shipment.

"If prices continue to go up," Tudor said, "it certainly puts a lot of pressure, especially on smaller retailers, to get enough money to pay for gasoline up front."

Some experts this week have speculated that gas could reach $5 a gallon this summer if the political turmoil in Libya spreads to other oil rich states and disrupts production.

"If this thing escalates there's a good chance that there'd be a shift in supplies, $5 gas isn't out of the question," Darin Newsom, a senior analyst at energy tracker DTN, told USA Today.

That may seem unreasonable to some, but even the skeptics expect prices to raise to a painful level.

"We're really seeing a what-if scenario," Jessica Brady, a Tampa-based spokeswoman for AAA told the AJC. "At this point, I would not be concerned about $5 a gallon gasoline."

Instead, she said, people should be concerned about $4 gas. Projections in January, before the Middle East and Africa erupted in political turmoil, had prices rising near levels not seen since those painful weeks in 2008.

"At this point, I would say high threes or four [dollars] is more possible," Brady said. She expects people to get react with alarm -- and cut their travel and other spending -- if gas reaches $3.50 a gallon. "That's going to be the next sticker shock," she said.

Former Atlantan Susan Kunze is already shocked. The Sandersville resident said she drove by a local gas station were the price was $3.09 a gallon Wednesday. By Thursday morning, it had risen to $3.18, and when she drove by again at noon she saw $3.25. By 5 p.m., the price there and at competing stations had risen to $3.40.

"I've never seen it jump that much," she told the AJC. She saw the news reports about $5 gas. Her reaction when she saw the gas station price sign: "They were right!"

"We're going to start a pool around here to see how soon it gets to $5," she said.

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