Just like you, Leatrice Gomes feels the pain every time she fills up one of her vehicles with gas. The difference is that Gomes has almost 100 vehicles and needs them all to keep her company operating in the black.

"What can we do? Without fuel, we'd be out of business. Basically, we're suffering just like everybody else," said Gomes, owner of the 46-year-old Gomes School Bus Service in Kane'ohe.

And fuel costs could rise again today as the new gas-cap law goes into effect, possibly pushing prices at the pump to about $3.16 a gallon for regular on O'ahu.

Gomes and dozens of other business managers across the state — including those who handle everything from one-man operations to the state government's fleet of more than 5,000 vehicles — say soaring gasoline prices are squeezing their budgets like never before.

Ultimately, they say, the problem will hit back home with individual consumers. The cost of everything from a bus ride to the price of beer will end up increasing. The problem could apply some brakes to the state's growing economy, officials say.

"It's worse than ever before, and it's not going to get any better," said Bob Lewis, general manager of the Western Motor Tariff Bureau, which represents about 400 local transportation carriers whose rates are controlled by the state Public Utilities Commission.

Many of the fleet managers say they are locked into long-term contracts or governed by regulation or competition that prevents them from passing on increases to customers, at least for now.

"Most observers are struck by how limited the pass-through to date has been," said Bank of Hawaii chief economist Paul Brewbaker.

Eventually though ...

"The higher petroleum prices will bite deeper and have a more material adverse impact on real output. ... The prospect of a recession cannot be ruled out, but its probability is still dependent on how we respond to higher energy costs in the next year or so," Brewbaker said.

'THE BIGGEST EXPENSE'

With retail gas prices in Hawai'i averaging $2.95 per gallon last week — up 61 cents from the same time a year earlier — business owners said they're struggling to cope. Many had made other changes to increase fuel efficiency and said there isn't much more they can do but absorb the extra cost or pass it on to their customers.

"Eventually, I'm going to have to raise my fares a little," added Newell, who started the small business 12 years ago, when gas prices were less than $2 a gallon.

Take Newell's problems and multiply them by 1,000. Or 5,000. Then you start to see the quandary faced by some of the largest public and private fleet owners in the state: With an ever-rising price of fuel that's essential to their business, do they absorb the costs, and possible losses, or risk alienating customers by raising prices?

ABSORBING COSTS

Roberts Hawai'i, the state's largest privately owned tour and transportation company with a fleet of about 1,000 vans, tour and school buses, said its fuel costs increased by more than 50 percent over the past two years. The increase this year is expected to top $1 million.

"Fuel costs are now the second-largest expense line item behind salaries and wages. We cannot continue to absorb these escalating fuel costs and may have to pass on the cost to our customers by way of increased prices," said company spokesman Sam Shenkus.

Like most state-regulated transportation companies, Roberts received permission this year to raise rates about 7 percent and could reapply with the state Public Utilities Commission to add an additional 3 percent before the end of the year.

So far, though, most companies have been reluctant to do that.

"It's a highly competitive market and we have contracts with wholesalers who have our prices printed on their material for the whole year. You can't be changing prices on them," said Bucky Yee, owner of Elite Limousine Service, which has a fleet of 23 town cars, luxury vans and one 10-cylinder sport utility vehicle.

"And in the luxury market, you can't count pennies. You can't turn the air conditioning off to save money. There's nothing much we can do. Our prices are more or less going to have to stand for now," Yee said.

The Motor Vehicle Tariff Bureau, whose members deliver everything from tourists to freight, said it's trying to hold the line on prices, even though almost all of this year's rate increase already has been eaten up by the rising fuel costs.

"We could go back right now and ask for another increase, but it's an unwieldy process," general manager Lewis said.

FUEL SURCHARGE

A better process would be to allow shippers to impose a fuel surcharge, much like the one Hawaiian Electric charges its customers as fuel costs go up and down.

"It makes sense because if the fuel costs go down, then the prices go down, too," Lewis said. "With rate increases, the prices just keep going up. But we were turned down when we asked for a surcharge last year and the indications are we would be turned down again if we asked."

Even if companies don't pass along the higher costs immediately, they're bound to have an impact on the economy, Brewbaker said.

"Existing budgets unexpectedly have had to be realigned to cover the higher costs of petroleum-fueled energy, to the detriment of other potential outlays," he said. That's causing spending to drop in other areas, which may already be costing the state as much as a half-percentage point in growth this year, he said.

Government officials also are feeling the gasoline pinch. Honolulu police say the annual fuel costs for their fleet of 1,900 vehicles went from $2.17 million in 2002 to $2.98 million last year — a 37 percent increase.

And state comptroller Russ Saito said rising fuel costs for some 5,000 state vehicles may force officials to cut back in other areas, such as maintenance or the purchase of new cars.

If there's any good news to be found in the higher gas prices, it's the fact that alternative fuel development will be spurred as more and more businesses and customers are hit in the pocketbook, Brewbaker said.

BETTER TECHNOLOGY

Analysts say that advances in energy-efficient technology, alternative fuel development and other technology improvements already have dampened the short-term adverse impacts of the rise in energy costs during the past year or two, helping to keep Honolulu's inflation close to the national 3 percent rate.

That shows up in company after company, in one way or another. Newell said she traded in one of her shuttle vehicles last month to increase gas mileage from 19 to 26 mpg. Gomes said advances in fuel-efficient technology are finding their way into the school bus industry, although mileage on a typical bus still averages 7 or 8 mpg. And Hawaiian Electric said it is increasing the number of vehicles in its fleet that use electricity or biodiesel fuel.

Still, with world crude oil output more or less maxed out and international demand increasing, "today's higher crude petroleum prices are the market's best signal that alternatives are worth exploring and that the financial viable alternatives should be profitably adopted," Brewbaker said.