SHERMAN, Tex. -- It is budget season for most cities, and with gas prices continuously on the rise, officials are planning ahead to make sure they allocate enough room for any extra spending. AAA has put the national average at $3.79 a gallon, 39 cents higher than a month ago. Those prices are causing problems in every aspect of the economy, from small to large businesses. Daniel Gotera explains.

It seems like every day the price of gasoline goes up. Experts say a gallon of unleaded could hit $4 by the end of the summer. Today we looked at how every cent increase means hundreds of dollars in costs for businesses and cities.

Prices at the pump are not the only numbers that are going up.

"It’s getting really hard, everything is going up," Lupe’s Tamale owner John Arazola says the price to make one taco dinner has gone up 40 cents. It doesn't sound like much, but when you take into account that the price of a bag of rice has gone up $11, a shipment of beans has gone up by $8, and chips by $2, it starts to add up, decreasing revenue by around 10 percent in the last month.

"Shop locally that way we don’t have to drive everywhere and pick vendors that our close by. That way they don’t have to raise the price to come over here."

Restaurant owners aren't the only ones struggling. Sherman city officials say fuel prices usually take up 1.5% of the city's budget, but this year the gradual increase in fuel has led to a 35% increase in cost for the city.

This year, the city could spend more than $300,000 on fuel alone.

"The bottom line is people are just going to have to get used to gasoline being more expensive than it used to be," Kevin Simmons, professor of economics at Austin College says. Simmons says doesn't see gas prices dipping below $3 before the end of the summer, mainly because of the low supply.

"We have tapped out most of the easy oil that can be had in the United States, there’s still oil to be had but it’s harder to find and it’s harder to extract."

Simmons says an over dependence on foreign oil combined with high prices has led many companies here in the states to drill more wells, looking not just for oil but for alternate forms of energy like natural gas.

"Oil and gas industry is picking up, and everybody is trying to enhance the oil and gas industry and drilling is at an all-time high."

But for now, those struggling, like Arazola, will have to find some way to make ends meet.

"Stay open later maybe and come up with some new dishes and see how it goes."

So what can you do to reduce the effects of an increase at the pump?
Simmons says other than riding a bike, smarter use of gas is a must, taking into account what you really need, and limiting driving are key factors.