Over the last few months, Ali Ganji has struggled to shake the thought: After nearly 35 years, maybe it's finally time to shut down his San Diego towing business.

Record high gas prices and skyrocketing inflation have rocked Guardian Towing, the company Ganji launched as a young man in the mid-1980s, starting with a single pickup.

Ganji said he can raise prices on some of his private tows, but most of his business is contract work with the city and with local law enforcement, and those rates are locked in. He's also facing political pressure from a councilman who thinks towing companies like Ganji's are paid too much. "He's out of his mind," Ganji said. "He's got no idea what he's talking about."

Ganji is 61 years old, and he knows his business career is closer to the end than the beginning. And the pressures of the current business climate are keeping him up at night.

"I talk to my wife constantly about it. 'Honey, maybe it's time to retire,'" Ganji told National Review. "Yes, the pressure of quitting is there."

Businesses across the country have been hammered this year by rising gas prices, which have been hitting record highs every day for almost two weeks now. Gas prices now top $4 a gallont in every state, and some analysts worry prices could top $6 this summer. Walmart and Target recently missed earnings expectations, in part because of higher freight and transportation costs. Uber and Lyft have added fuel surcharges to help drivers cover increased gas costs. Smaller businesses like Ganji's, particularly transportation-related businesses – food- and flower-delivery services, shipping companies, caterers, charter boats – have been hit particularly hard.

Nowhere have the fuel-related pressures been greater than in California, the state with the nation's highest gas prices. On Friday, while the average price for a gallon of gas in the U.S. reached $4.59, Californians were already paying over six dollars, or $6.06 per gallon, according to the American Automobile Association. In some California cities, it's much higher. A gallon of diesel fuel in California is already nearing the $7 range, reaching $6.58 per gallon on Friday.

That California premium is due almost entirely to state-specific taxes and regulations, said Wayne Winegarden, a senior fellow in business and economics for the Pacific Research Institute. California's cap-and-trade program, underground storage tank cleanup fee, Low Carbon Fuel Standard, and required boutique fuel blends all add to the cost of fuel, according to the institute. Winegarden's research has found that city and state climate-change lawsuits, and expensive judgments, discourage private-sector innovation and also increase gas costs.

"While current circumstances have brought this issue to national attention, this has really deserved attention in California for a very long time, because it's been impacting people for a long time," said Winegarden, who noted that the state's population has been declining in recent years in part because of cost-of-living increases. "Obviously gasoline is not the only thing, but it's a death by a thousand cuts type of situation."

In addition to paying more for gas, Gangi said he's also seen significant increases in his tire, oil, and maintenance costs. A 55-gallon drum of oil that used to cost him $300 is now running closer to $600, he said. Ganji, who has six employees, said he doesn't see any reason to believe those costs will come down anytime soon. In the meantime, he said, he and his wife have given up taking vacations, and he's tightening his belt at home to help his two teens pay for college.

"If I shut down, there are six people that need to go out and look for a job, including myself maybe," Ganji said. "If I want to pay for college fees, definitely I need to be still working."

Johnny Salgado, the owner of Johnny's California Shuttle Service in Long Beach, told National Review that he's had to hike his rates "tremendously" to keep up with rising gas prices, and that has cost him customers.

Salgado, 45, started his business about a decade ago, buying his own van and heading out on his own after previously working at another shuttle- service company, he said. He does a lot of work shuttling people to Los Angeles–area airports and to Disneyland, he said. His business was hit hard first by the Covid-19 pandemic, and now by rising gas prices and inflation. As he's increased his rates to keep up, he's seen more people turning to taxis and ride-share services, which tend to be cheaper, but offer fewer services, such as car seats and booster seats.

Salgado said that like a lot of drivers, he tries to fuel up at gas stations with lower prices, a strategy that doesn't always pay off. "Even if you're trying to find the cheapest gas, you're really driving out of your way, you're not finding that much cheaper," he said.

Salgado said he believes President Joe Biden's administration deserves much of the blame for the sky-high price of gas and 40-year-high inflation.

Biden has tried to blame the rising gas prices on the Russian invasion of Ukraine – "Putin's price hike," he's called it – and on oil-company greed. But gas prices were rising even before the war. Demand is up and supply is down, in part because of the war, but also because of OPEC production decisions, U.S. sanctions on oil exports, efforts by the administration to stop or slow investments in oil pipelines, and environmental lawsuits, among other reasons. The Republican National Committee has referred to increasing gas prices as "the Biden Gas Hike," and claimed last week that the president "is hurting those who can afford it the least, and he doesn't seem to care as he doubles down on the policies that put Americans in this mess."

In California, Republicans have called for an immediate suspension of the state gas tax, and have launched an online timer to document how long it takes Newsom and the state's Democrats to provide gas tax relief. In March, Newsom called for providing California vehicle owners with two $400 gas rebates to help them with gas costs, a proposal that didn't sit well with progressives who believe it runs contrary to the state's climate goals. Newsom also proposed $750 million in grants to encourage public-transit systems to offer free rides, according to the nonprofit CalMatters news site.

Cynde Harris, who owns the Go Kart World amusement park in Carson, Calif., with her husband, John, said she's not expecting relief from the state's lawmakers.

"Calling them now and talking to them about gasoline when they are all environment all of the time, they're going to say, 'Yeah, yeah,' and get off the phone," she said. "It just seems like the Democratic Party does not care about business."

Go Kart World features six tracks and 200 go-karts that use about 500 to 600 gallons of gas per week during the summer, Harris said. The spike in gas prices has coincided with the amusement park's busy season, which typically starts in March and runs through September.

In 2019, Go Kart World paid $47,109 for fuel, Harris said. Not even halfway through 2022, they've already spent $37,986 on gas this year, she said. Oil and gas have gone from representing about 2.7 percent of the Go Kart World budget to over 5 percent, Harris said.

While the rising gas and oil prices sting, Harris said her biggest struggle now is the worker shortage and rising labor costs, driven by mandated minimum-wage increases in the state. Go Kart World has about 60 employees, most of them young and living with their parents.

Harris said that to offset the increased gas and labor costs, they've closed the Go Kart World kitchen. She's also stopped running the primary air conditioner at home during the day, replacing it instead with a small unit to just cool her home office.

Harris said they're fighting hard to avoid raising prices for their customers, calling it "the last thing we want to do." But she said rate increases may be inevitable.

"I don't know how we're going to make it through the summer without raising prices," she said.

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