Gas prices in the Rogue Valley are expected to hit a record high by today and diesel prices already set a record Tuesday. And the ongoing high prices will ripple through the market, pushing up costs for everything from an airport shuttle ride to a slice of pizza, say local business people coping with the costs.

Gas prices in the Rogue Valley are expected to hit a record high by today and diesel prices already set a record Tuesday. And the ongoing high prices will ripple through the market, pushing up costs for everything from an airport shuttle ride to a slice of pizza, say local business people coping with the costs.

The average price for a gallon of regular gas in Medford Wednesday was $3.517, a slim fraction of a cent below the record price of $3.518, set May 15, 2007, according to price data compiled by AAA Oregon. The price rose nearly 3 cents from Tuesday to Wednesday and wasn't expected to reverse course yet, said Marie Dodds, director of government and public affairs for AAA in Oregon and Idaho.

Diesel hit a record of $3.881 per gallon Tuesday, before slipping to $3.875 per gallon on Wednesday.

Dodds said that recent increases are tied to the soaring cost of crude oil, which briefly topped $110 a barrel in futures trading Wednesday.

Usually spring fuel price increases are driven by high demand and diminished supply as refineries shut down to switch to summer fuel formulations, she said, but this year supply is high and demand is down. Instead, investors and speculators are pushing crude oil prices ever higher, as part of what some analysts fear could be a bubble in the commodities market.

"As crude goes up and up, we will see an increase at the pump," Dodds said.

AAA is currently forecasting national gas prices to level out somewhere between $3.50 and $3.90 a gallon by summer. Because West Coast prices typically are higher than the national average, Dodds projects that gas prices in Oregon could top $4.

Waiting for afternoon flights to arrive at the Medford airport, Alan Mandel, a cab owner-operator who is dispatched by Valley Cab, and Craig Hollinsworth, an owner-operator working with TLC Yellow Cab, both say cab companies likely will raise rates if gas prices top $3.75 a gallon.

Hollinsworth estimated that the increases in the past six months have eaten up thousands of dollars of potential income for him.

Nancy Buffington, owner of Cascade Airport Shuttle, said she raised rates for a single trip from Ashland to the airport by $2 to $24 in April and she anticipates another boost that size this spring. She's also discontinued discounts for multiple parties riding on the same trip.

"It's a balancing act," she said, noting that she wants to keep rates affordable but has to cover her costs for fuel, maintenance and insurance.

Toni Williams, a floral designer at Corrine's Flowers in Medford, said the shop increased its delivery charge by $1 to $9.95 last year when gas prices were around $3 a gallon.

"Some people come in to pick up flowers because they don't like the charge," she said.

Corrine's stopped making deliveries in Ashland several years ago because of the costs and doesn't deliver to Eagle Point, either. The shop maps out routes and tries to group deliveries by neighborhood to cut costs for its delivery driver, Williams said.

Freight charges on flowers and plants, which are shipped from Columbia, Ecuador, Canada and California, are constantly on the rise, too.

"Freight has been terrible," Williams said. "We shop around to try to keep that down."

Trucking companies rely on fuel surcharges to passing costs on to customers, said Mark Gibson, president of Siskiyou Transportation, a local carrier based in Ashland, and chairman of the Oregon Trucking Associations board.

"It's become a fixture in the industry, but it doesn't entirely offset the price," he said, noting that the cost of diesel has soared more than a dollar from $2.70 a gallon a year ago. "You can't stay on top of that."

He said companies are working to gradually improve fuel efficiency of their fleets, using biodiesel to qualify for tax credits, and coordinating loads so trucks don't travel empty.

"Companies are always looking to save money, but they know fuel prices are definitely going up," Gibson said. "It's never going back down to where it was a year ago."

Rich Norquist, operations manager at Gold River Distributing, a beer and wine wholesaler that delivers to 800 businesses in Jackson, Josephine, Klamath and Lake counties, expects fuel costs — a big part of annual expenses — to continue to rise. He said the company's fleet of trucks and vans drives about 250,000 miles a year, and just the big trucks suck down nearly 60,000 gallons of diesel annually.

The company also takes deliveries from wineries and breweries via 10 to 20 semis daily, and each of those now include an additional charge for fuel costs, Norquist said.

Gold River hasn't systematically increased its prices to pass along all costs, he said.

However, some companies have. Betsy Combs, head server at Creekside Pizza Bistro, said delivery costs for kegs at the Ashland bar and restaurant have gone up $20 to $40 recently, prices for cheese and other dairy products have soared nearly 40 percent and flour prices have climbed about 25 percent.

"Everything we use to make pizza is more expensive," she said.

Although Creekside hasn't changed prices since opening in 2005, it is looking at adjustments now, Combs said, noting that other Ashland pizzerias have raised prices in recent months.

Delivery is still free, though, she said.

Reach reporter Anita Burke at 776-4485 or at aburke@mailtribune.com