Personal Finance

Hold onto your wallets, gas prices are heading to an all-time record high. Here are a few ways to protect yourself

Key Points
  • Increased demand and reduced supply is quickly driving gas prices higher.
  • The national average for a gallon of gas hit $4.009, the highest since July 2008, according to data from AAA. 
  • The average price of a gallon of gasoline will likely set a new all-time record within a day, according to GasBuddy.  
  • Here are a few ways to protect yourself from price hikes.
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With gasoline prices at a 14-year high, it's hard to imagine paying even more at the pump. Yet prices are only heading higher.

On Sunday, the national average for a gallon of gas hit $4.009, the highest since July 2008, according to data from AAA. 

An increase in demand along with a reduction in supply is quickly driving up prices at gas stations, the automotive group said.

With the recent rise, consumers are now paying 40 cents more than just a week ago.

"There are few words to describe the unprecedented rise in gasoline prices over the last week, with massive spikes coast to coast in both gasoline and diesel prices, as oil prices jump to their highest since 2008," said Patrick De Haan, head of petroleum analysis at GasBuddy.

"Forget the $4 per gallon mark, the nation will soon set new all-time record highs and we could push closer to a national average of $4.50," he said. According to GasBuddy, the average price of gasoline will likely set a new all-time record within a day.  

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The worst may be yet to come, AAA also said, as Russia's war on Ukraine prompts fears of severe supply shortages.

More than 50% of the cost of gasoline is based on the price of oil, according to the U.S. Energy Information Administration.

Depending on where you live, there may already be wild upswings in prices. In Michigan, Indiana, Illinois and Ohio, gas prices jumped 30 cents or more in about a week, according to AAA.

In California, the average was $5.343 as of Monday morning but some stations are charging $6 and beyond, according to De Haan.  

"We've never been in this situation before, with this level of uncertainty," he said.

How to save on gas

Now, nearly 9 in 10 car owners are concerned about being able to afford filling up, according to a separate report by AutoInsurance.com.

To shield yourself from soaring prices at the pump, consumer savings expert Andrea Woroch has these tips:

Track gas prices. Apps like GasBuddy, Gas Guru and AAA TripTik can track down the cheapest price per gallon between gas prices. 

Even if the difference doesn't seem like much, it can still add up to hundreds of dollars a year.

Pay with cash. The price per gallon can be 10 cents to 15 cents more per gallon for credit card transactions. Pay with cash instead to get the lower price or use a gas rewards credit card to earn cash back on those charges.

(CNBC's Select has a full roundup of the best the best cards for fueling up based on your consumer habits.)

Drive strategically. Carpooling to and from work and school or sports practice can dramatically reduce your time on the road. You can even find ride shares using sites like ZimRide, RideJoy or eRideShare.com, Woroch advised.

Also, order online and look for free delivery to cut the cost of getting groceries, take out and other daily essentials.

Sign up for loyalty programs. In addition, loyalty programs, which many major gas station chains have, can help offset the price at the pump.

Some grocery store chains may also offer cents-per-gallon rewards. For example, Kroger and Shop & Stop give fuel points for every $1 spent on groceries, which can be redeemed at participating gas stations. 

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