Gas prices pose risk to economy

Nationally, the price has reached a record high - $3.20 a gallon on average yesterday - surpassing the peak of the spike after Hurricane Katrina in 2005. In fact, adjusted for inflation, the national price now exceeds the price spike of 1981 brought on by the Iran-Iraq war.

Economists fear that if the cost of fuel stays too high for too long, the entire economy could feel the impact, through increased inflation.

"All prices will be affected," said Diane P. Flaherty, chairwoman of the economics department at the University of Massachusetts at Amherst.

"Surcharges were added by Papa John's and Pizza Hut in response to rising gas prices in 2005. This also shows up clearly in airline ticket prices, which add a gas surcharge, and in the prices of companies like FedEx and UPS," she said.

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