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Small Businesses Begin To Feel Pain From Gas Prices

DENVER (CBS4) - Gas prices went up again overnight in Colorado but AAA says the state has some of the least expensive gas in the country.

The average price for a gallon of regular unleaded gas in Colorado rose a 1 cent to $3.33. The Denver metro average is $3.30 a gallon, about 70 cents higher than a year ago.

It's just the latest price increase taking a toll on small businesses.

Pasquini's in Denver makes great pizza and sells it at affordable prices. Now rising gasoline prices are threatening to take a bite out of profits for the family-run restaurant.

"It's driving our food costs through the roof," Pasquini's manager Joel Biggs said.

Flour is just one example. It's up $1.50 in just the past two weeks because of higher transportation costs, according Biggs.

"Cheese is up $2.50 a case in the last week and a half," he said.

The prices for eggplants and lettuce and other items of produce are also up, but not because of fuel prices. They have been driven higher because of weather-related events like hard frosts and floods.

Yet soaring gas prices are a bigger deal because they affect customers, too. For many, filling the tank is a necessity, while dining out is optional.

"I think the change in fuel prices could definitely impact where you chose to spend your extra money," pizza customer Rick Slan said.

To lure business, Pasquini's offers lunch specials and coupons. Still, there's pressure to charge customers more, admitted general manager M.C. Guillemette.

"Raising prices, yeah, you know, you've got to think about that," Guillemette said.

For now Pasquini's is holding the line by eliminating waste in the food preparation. But if higher gas prices must be passed along, Pasquini's intends to explain the hikes through advertising.

"Educate the customer as to why things are increasing, why you're forced to raise prices," Guillemette said.

The president of the Colorado Restaurant Association says even with less disposable income, people will continue to dine out.

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