ATLANTA — WJ Smith usually pays about $500 per week in fuel costs for his landscaping company. The money adds up, and he's noticed a sharp spike in gas prices lately. Per AAA, the average price for a gallon of gas in Georgia went up 15-cents in just a week. It currently stands at $3.99 per gallon of regular gas.
“That’s direct profit right out of the company’s profit margins," Smith said. "It just goes right to the bottom line and takes away a lot of the profit. By having a landscape service, unfortunately, we can’t pass the price on to our consumers without pre-notice, and it’s a little absurd.”
Smith said to stay competitive, he has to forego charging customers more to account for higher gas prices.
Georgia is one of three states that has an average below $4 per gallon, and the state is 30-cents off its record-high $4.29 per gallon set on March 11. However, gas prices averaged $2.97 statewide this time a year ago. As a result of reaching the recent record high, Georgia Governor Brian Kemp enacted a temporary state gas tax suspension on March 18.
The state gas tax is 29-cents, and the gas tax suspension expires on May 31. The Governor's Office told 11Alive that Kemp would make a determination closer to the deadline of the gas tax suspension's expiration. They also pointed to a state income tax cut and a tax refund as helping Georgians find relief in their wallets.
For context, the state collected $157.4 million in gas tax in February per the Georgia Department of Revenue. That would equate to about a $300 million loss in tax revenue over the time the state gas tax has been suspended. The money pays for transportation projects across the state. The Governor's Office said it did not fear a budget deficit or major impact on critical projects because of the loss of revenue.
Smith said he would be in favor of extending the gas tax suspension, but he said it didn't really make a big difference overall.
With Memorial Day and the summer holiday just around the corner, Montrae Waiters with AAA said to expect a surge in demand and a surge in gas prices.
"We’re dealing with high food prices, hotel stays, rental cars," Waiters said. "Everything has increased, but what we’re finding is that that’s really not deterring folks from traveling.”
Waiters attributed the high gas prices to a spike in crude oil prices and two years of pent-up demand for travel. She expects gas prices to continue to increase throughout the summer.
"The market is so volatile, it’s just really too early to tell where we’re going to be by the end of this week,” Waiters said. "Folks are going to be hitting the road, so look for different ways to save at the pump. Look into fuel reward programs, do your research.”
Dr. Saloni Firasta-Vastani, a marketing professor at Emory University's Goizueta School of Business, said war overseas and inflation are also contributing factors to high gas prices. She noted the domino effect inflation had on rising labor and transportation costs, along with a labor shortage as reasons prices may not come down as quickly as consumers may want.
Firasta-Vastani suggested that states can work with private companies and corporations to bring relief to the pump.
“Work with corporations to develop public transit to get people places, making it easier for people to do that – easier on carpooling – may be having flexible work policies, work from home or shifting schedules," Firasta-Vastani said.
People like Smith are still waiting for relief because their livelihoods depend on it.
"Unfortunately, it’s just the nature of the beast, and we’re just a victim of the circumstances with the oil prices," Smith said.