California woke up to higher fuel prices Wednesday morning and the effect may be minimal on drivers, but it is a cause for serious, long term concern for businesses.

It's a dire situation for the folks at ITS Logistics in Sparks.

“If we don't take the right actions and don't get the right responses from our customers we can literally see this erasing our entire profit margin and pushing us into a negative income situation,” said ITS Logistics President of Fleet, Jim Dingman.

They do a lot of business in California, which at 12:01 this morning spiked its gas tax 20 cents per gallon for diesel. When you use 100,000 gallons a week, it's an extra $1 million a year.    

“We have to pass that along through all corners of our network.”

They work with hundreds of companies transporting goods across the country, but their roots are here in northern Nevada. How the California gas tax will impact their 450 employees is especially concerning.

“All it does is shift our cost pressure away from being able to support local employees and their families and their wages and moves it out of state.”

Then there is the mom and pops that depend on raw goods from California. Homage Bakery on Ralston Street in Reno knows the ever growing pressure of price increases.

“When you have a change in different things like fuels or raw good costs, that affects us drastically,” said owner and chef Nicolle Alumbaugh.

They work with several California based food distribution companies and are anticipating a spike in fuel surcharges in an already costly and profit-pinched industry.

“We make money as a small business literally based on pennies.”

When it comes to how you, the consumer, will be affected, the answer is clear.

“Whether it's beef jerky or toilet paper or Cheerios this affects everything everybody buys,” said Dingman.

But how much prices go up is still unknown.