Gasoline's ripple effects.

The price of crude oil is up more than 65 percent for the year, and the cheapest gasoline in Los Angeles is now over $2.20 a gallon. While this will certainly have an impact on family budgets and certain aspects of doing business, the broader implications of the upswing remains unclear. So the Business Journal asks:

How do you the think the rise in oil prices will affect the economy?

Jim Lynch 

Chief Executive

Beverly Hills Chamber of Commerce

It's going to be harmful to the local economy. None of the net proceeds is going to stay with us. And it's going to dig into discretionary spending of all consumers. That's going to have an effect on our retailers, the cost of food, restaurants and transportation. Goods, services, and personal transportation are going to be unnecessarily expensive.

Christopher Thornberg

Senior Lecturer

UCLA Anderson School of Management 

The effect is going to be so mild compared to everything else going on that it will be undetectable. We have consumers up to their eyeballs in debt, we have an enormous government deficit, and a real estate bubble so this oil thing is not that big of a deal. Adjusted for inflation, the price of oil is not at an all time high. In today's dollars, oil was close to $95 a barrel in the late '70s and early '80s. The other side of the equation is this: we as a nation are as oil dependent as ever. Forty years ago, the average consumer spent 6.5 percent of disposable income on gas, heating oil, and other petroleum products. Today it's about 3 percent. Our oil has been way too cheap way too long.

Johne Baker

Vice President, Owner

A List Limousine & Transportation Services Inc.

We've left our base prices alone, but we've added 5 percent to our surcharges. We used to charge a 20 percent tax, gratuity and gas surcharge, and now it's 25 percent. It doesn't make up for the whole ball of wax, but it helps. Everyone has done it in the industry, all across the country, not just us. There are some guys who probably don't, and they will take some of our business, but they won't last. Our gas expenditures have gone up at least 20 percent in the last year.

Linda Prosk

Leisure Manager

Altour Classic Cruise and Travel

The rise in oil prices has not affected our business at all. Our clients have never made travel decisions based on energy prices. They are more concerned about terrorism and which countries to go to. Safety is their number one concern.

Scott Farb

Principal

Gumbiner Savett Inc.

With the densest automotive usage in the country, rising oil prices have had immediate effects on virtually every aspect of the Southern California economy. Since transportation and consumers are the hardest hit, the dramatic surge in oil prices affects discretionary income and can be viewed as an additional tax on vehicle usage. Aside from the benefit to oil companies, we can continue to expect a pervasive negative effect on all levels of commerce, including trucking, delivery, retail and the airlines.

Tom Gau

Certified Financial Planner 

Thomas B. Gau

Enterprises Inc.

It will affect the economy in a negative way, but the effect will be short-lived. Look at the oil embargo in the '70s, with the gas lines. It was terrible while it lasted, and then it was over. Commercial oil inventories are 5 percent above last year's level. Hedge funds and other fast-moving traders have now gone into the oil markets, so that is driving the price up. The fear of oil shortages will probably go down once other factors, such as the election, are resolved.