Image: Buying gas © moodboard, Corbis

Related topics: family, budgeting, gas prices, cheap cars, food

If you drove up to the pump tomorrow and saw that gasoline had hit $10 a gallon, you'd have to start acting as though you lived in a remote Alaskan village, where $10-a-gallon gasoline is already a reality.

You'd still fill your tank, because you'd have important places to go. You couldn't stop using gasoline completely, just as people living in rural Alaska can't. There, they need gasoline and diesel fuel to heat homes, generate electricity and run the four-wheel-drive vehicles they use to hunt caribou, moose and birds.

Caribou hunting probably isn't on your to-do list, but your grocery items -- unlike those animals in the Alaskan bush -- would cost more once you got to the store.

So you'd perform the same difficult balancing act people in Alaskan villages do: cutting back on other expenses to be able to keep driving to the places you needed to go.

It wouldn't be fun. At $10 a gallon, you could pay $310 to fill the tank on your Chevrolet Suburban. Even a fill-up on a Honda Civic could cost $132.

Less money for other things

"It's hard for people to stop using fuel," says Fred Rozell, the director of retail pricing for the Oil Price Information Service, which tracks gas prices at more than 100,000 stations around the U.S. "They must still drive to work. They can only do so much telecommuting or carpooling. Most driving is still needed, and people make up for the increased cost in other areas of their lives."

There would be less money for other goods -- food, clothing, building materials, etc. -- and those items would be more expensive, because companies would pass on their higher transportation costs to consumers, says Troy Green, a national spokesman for AAA.

How much more expensive? Todd Hale, a senior vice president at research company Nielsen, says $10-a-gallon gas could boost the inflation rate to 10%. The result would be devastating to the world economy and to the global food situation, he says.

In the U.S., the restaurant business would be the first to see the reduction in spending as people cut back on how often they ate out, says Rozell. That probably would cause some restaurants to go under.

The grocery business would then see the effects, as shoppers switched from premium to store brands, used more coupons and waited for sales.

The actual cost of groceries would go up, but food prices would not follow in lock step with fuel costs. In 2008, for instance, the price of fuel oil rose more than 30%, and gasoline went up almost 20%. But the increase in food prices was only 5%, compared with 4% the year before.

Another statistic from the U.S. Department of Agriculture might explain that: A little less than 7% of the consumer dollar spent on food goes to energy. But that 7% represents a 75% increase from 1998. Further, Joseph Glauber, the chief economist for the USDA, in a speech Feb. 24 predicted a "stronger increase" in retail food prices in 2011 because of higher energy and commodity prices.

Especially hard hit by $10-a-gallon fuel would be trucking companies and airlines, which started announcing fare increases Feb. 25 in reaction to their rising fuel costs.

"When oil hit $145 a barrel in 2008," AAA's Green says, "that started the airlines' move to charge for services that had been complimentary -- checked baggage, drinks and food on board, charges on ticket changes. With those charges already in place, you have to ask, 'What next?'"

Package delivery companies such as United Parcel Service know what would be next: fuel surcharges. They used them in 2008, and if diesel were to hit $10 a gallon, a package that previously had cost $100 to ship would cost $120 to $130, reflecting the surcharges.