Gasoline pricesOn Dec. 17, Tom Kloza, chief oil analyst for Oil Price Information Service, wrote on his blog that "we have never, ever celebrated Christmas day with U.S. gasoline prices at $3 a gallon or higher."

All of that changed a few days later, when the national average hit $3.01 two days before Christmas and just in time to pluck a few more dollars out of the wallets of holiday travelers. Kloza tells me that we started 2011 with the highest gas prices ever for January, which doesn't bode well for the coming months. Still, the sky isn't falling.

"There's a lot of hyperbole out there, with $4 and $5 numbers. Will you see $4 a gallon by summer? Sure, if you return the rental car unfilled and they charge you that ridiculous price for gas. But generally, we're in the second-highest price environment ever, and I think $3.50 and $3.75 will be the top."

Even so, that's a lot of money to fill our gas tanks. Kloza says a peak of $3.75 a gallon would equate to about $1.4 billion a day, a lot of cash to get from point A to point B. Here's how the impact will translate to your wallet -- and your investments:

Return to Cost-Cutting Mode. Certain thresholds cause consumers to start changing their behavior, says Kloza. When gas is over $3 a gallon, we start to think someone is taking advantage of us. We cut back on our discretionary driving a little. But when it hits $3.40 or $3.50 a gallon, we make real changes. In 2008, we carpooled, took public transportation more and used websites like gasbuddy.com to find the cheapest gas prices on our commute.

When gas prices dropped, use of some of these cost-saving measures did, too. It's time to bring them back. Find a buddy to commute to work with -- or consolidate your commute with your spouse's. If that's feasible, you can cut your gas costs significantly. To figure out exactly how much you could save, plug a few quick details into drivepricing.com. If you can take a bus or train, you'll save even more (yes, New York, even with last week's fare increases).

Finally, try to brainstorm other ways you can save. I like to combine my trips, so I hit the pharmacy and grocery store on the way to pick up my kids from practice. If you live in a bike-friendly area -- and most cities are getting more bikeable all the time -- pedaling more might be a good option.

Expect Higher Prices All Around.
The cost of crude oil has a trickle-down effect. It hits gas prices, but it also raises diesel and jet-fuel prices. "Those numbers can really infiltrate every nook and cranny of the economy -- pretty much everything in the country. If it moves by rail, it's very diesel-dependent, and if it moves by truck, it's entirely diesel-dependent," says Kloza. Higher energy prices also translate into higher packaging costs. That means we might be paying more at the supermarket, the mall, the take-out place and, of course, the airport.

Brands May Suffer.
If you're investing in companies that are taking crude oil out of the ground right now, you're likely doing quite well, and that trend will continue. Kloza says with prices over $90 a barrel, you also have a huge safety net: "The price of bringing crude oil to the market varies from $1.50 a barrel to maybe $60 a barrel. So there are tremendous profits being made on the crude oil side. On the refining side, it's spotty, but much better than anticipated."

What does tend to get hurt by higher gas prices? "People still need to get fuel, but what happens is other retail companies and restaurants, those are the ones that get threatened by higher prices. If you make branded merchandise, you can feel that pain, and that's what we saw happen in 2008," he explains. The same, of course, goes for the makers of gas-guzzling vehicles like SUVs. So, companies in those categories could see their stock prices suffer.

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Jeanne

The PEOPLE do not comnplain about the high price of gas in the Netherlands and other countries, because they drive small cars and get 60 miles to a gallon. That is quite a contrast when we drive big cars and may get 20 miles a gallon. I wouldn't mind paying that price if I would get 60 miles to a gallon.

January 17 2011 at 1:42 PM Report abuse rate up rate down Reply
hannas514

Great Article
you should look into an electronic item in the market called FD-47
its proven to save you 15% to 30% on your gas mileage

www.FuelDoctorUSA.com

January 10 2011 at 2:37 PM Report abuse rate up rate down Reply
newbasicse

I am working on a New Camel $hit /solar /Fred Flintstone/ peddle operated/mother in law mouth powed / raisin/ bean/ wind/fuel cell/ CNN Methane driven Ricshaw.
Soon to released on the market.
Soon your worries will be gone

January 10 2011 at 2:37 PM Report abuse +1 rate up rate down Reply
daveswrath0704

the price of Gas will keep going up ever time they make car get better mpg if car get 10mpg it 3.00 gal and when car get 30mpg gas will be 5.00gal face it the less we burn up the more the price will go up the Big Oil will make sure of it so it a big joke buy small car buy big and be happy and safe on the road FACTS1111111111111111

January 10 2011 at 11:10 AM Report abuse +1 rate up rate down Reply
bygbubba

Soros is laughing all the way to his vault, filled with gold. He and his evil, ultra rich cronies aren't backing America, but they are backing Obama and the Demons in the white house and senate. Democrats, ask yourself why that is?

January 10 2011 at 4:35 AM Report abuse +1 rate up rate down Reply
bygbubba

Does anyone think gas prices or any other commodity we depend on will go down with this bunch of corrupt Demons in the white house and the senate? Our buying power will continue to decline under the socialist change so many Democrats voted for. Why do you think evil, ultra rich men like George Soros invest millions in Demoncrat politicians? Out of the goodness of his heart for you? Or maybe to steal your wealth and make everyone but him and his corrupt cronies poor so he has more power than ever?

January 10 2011 at 4:33 AM Report abuse +2 rate up rate down Reply
bygbubba

The question is how to cope with rising gas prices. First, defeat Obama in 2012. Second, defeat every other Demoncrat in 2012. Third, try their evil, ultra rich money backer George Soros on treason charges.

January 10 2011 at 4:25 AM Report abuse +1 rate up rate down Reply
CnOWrms1

Publius re: BP, shakedown. Texas Rep. Joe Barton, ranking member on the House Energy and Commerce Committee “apologized” to BP for the pressure the Obama Administration put on the company to fund an escrow account to compensate victims of the Gulf Oil leak. Some called for his resignation and dems launched a TV ad about the controversy. Glenn Reynolds summed it up best in this statement from The Hill: The story of BP vs. the White House is a story of crooks being shaken down by thugs, with a liberal dose of incompetence on both sides. Barton was only pointing out the shakedown aspect, but he was certainly dead-on with regard to that. ...... To quote another poster: Barry is "An empty suited sap ... and now he's successfully shook $20 B from the shareholders of BP... which candidate exactly will be getting .... money ..... to run against the Repubs..." That's "food for thought"! biggovernment.com/publius/2010/06/19/saturday-open-th .......

January 09 2011 at 7:45 PM Report abuse rate up rate down Reply
ibrunner2001

I said it earlier and I'll say it again. It's a much a FED problem as it is the oil companies. Keep printing money and making its face value deteriorate ala George Soros and the problem will continue. Oil has always been pegged to the value of the dollar. If the dollar is worth less as a currency because there are too many of them then we'll have to keep spending more for a barrel of oil on the world market. When the FED announces qe2 it's time to expect higher prices. AND remember, EVERYTHING WE USE is in one way or the other connected to oil and it's price, and no, switching to horses and buggies is not the answer. Getting our debt under control and shrinking the government and it's programs is.

January 09 2011 at 7:43 PM Report abuse +2 rate up rate down Reply
geordi13

Simple: get a job close to home; don't drive a gas guzzler; don't do jackrabbit starts; use an alternative form of transportation like walking, biking or taking the bus. Oh, wait, I'm talking to republicans, aren't I? Well then...just try to drive a pickup that gets better than 10 mpg.

January 09 2011 at 7:11 PM Report abuse -1 rate up rate down Reply
4 replies to geordi13's comment