Have you gassed up lately? Did you notice that prices have surged? Its going to eat up the cost of your morning coffee and maybe your donut too.

Gas prices have risen recently on average about 15 cents per gallon. In one week in New Bern, N.C., prices increased from $1.58 per gallon to $1.68 per gallon.

Clerks and station owners working at the New Bern stations said the prices have been going up because of increased demand over the past several months. Higher gas prices were also fueled by higher crude oil prices, which are rising due to the crisis in the Middle East.

Tancred Lidderdale, an oil industry economist with the Energy Information Administration, expects the U.S. gas price to be $2.03 per gallon this year, with this year being the lowest annual average since 2004.

Where do you think gas prices will go this year?

Fuel prices seem to be the number one concern on just about everyone's mind lately, and it seems like things are not going to be getting better any time soon. As prices have risen to record levels, many of us have decided to cut back on our driving, especially on long trips in order to save a little on our fuel prices. Well, the airlines are no different, and there's an interesting report today in The Wall Street Journal showing how airlines are cutting back on long flights in order to save a little on fuel consumption.

It is a pretty nasty cycle we are seeing with the airlines. The higher fuel costs have led to higher tickets prices and extra fees. These higher prices have led to less air traffic, and that has led to an even greater need to find more ways to cover rising costs. Definitely a tough situation.

The new way they are starting to combat the high costs of flying is by cutting back, or postponing long international flights, in particular flights that are in excess of 12 hours.

Continental Airlines, Inc. (NYSE: CAL) is making cuts due to rising fuel costs:

Airline mergers no longer look like a panacea for the industry. They do not solve the problem of higher fuel costs. They often drive the ire of unions which do not want to lose any more jobs. And, integration problems usually make customers mad, which can send them off to fly other carriers.

Perhaps because of some of these factors, United (NASDAQ: UAUA) and US Air (NYSE: LLC) are cooling talks about a tie-up. Or, it may be that each airline thinks it can find a better deal. "Even as its talks with US Airways were continuing, United had begun talks with Continental for a possible alliance," Reuters reports.

The most likely case is that managements at airlines are looking for ways to stay out of Chapter 11. Rising jet fuel prices and the potential of lower passenger traffic in a recession have executives working overtime to keep losses from piling up.

A merger does no good if neither party in the marriage is in good enough shape to add much to the deal.

Douglas A. McIntyre is an editor at 247wallst.com and author of Ten Stocks Under $10 letter.

In a move that may be imitated by large US carriers like AMR (NYSE: AMR), Delta (NYSE: DAL) and Northwest (NYSE: NWA), British Airways will ground part of its fleet to save money because of the rising cost of fuel.

According to The Times of London, "The airline would park its oldest, least fuel-efficient aircraft."

Analysts are concerned that British Airways may loss money for the next two years. By taking some aircraft out of service, the carrier could ameliorate some of that.

Wall Street may watch to see if big American companies have the sense to do the same thing. Most have debt loads large enough to move them toward Chapter 11, if fuel costs stay high and a rough economy hurts passenger traffic. Major airline mergers, some of which are fairly far along, will not solve the gas price problem. Taking jets out of service may, at least in part.

Douglas A. McIntyre is an editor at 247wallst.com.

I'm as guilty as the next American, but as far as fuel costs are concerned, it seems that we've become a nation of folks who love to complain about $3.00 gasoline but are doing little to actually fuel up less frequently. If public transportation isn't a viable option and carpooling doesn't make sense, one option could be a change in your current ride.

Some consumers have moved to smaller, more fuel-efficient automobiles, but this shift is impacting the mid-sized market, rather than the hulks of the highway. Since 2000, the market share for small cars (and compact trucks) has risen to 31.8% from 21.5%. The mid-sized market, on the other hand, including models such as Toyota Motor's (NYSE: TM) Camry and General Motors' (NYSE: GM) Chevy Malibu, has seen market share sink to 40.1% from 51.3%.

Now on the other hand, some drivers don't think an extra $10 or so every time they fill up is worthy of a lifestyle change. Large vehicles, including luxury SUVs, remain as popular as ever. At the turn of the millennium, these vehicles accounted for 27.2% of all sales. In the first quarter of 2007, large vehicles earned a 28.1% share.

While models such as the Cadillac Escalade and Land Rovers are still in high demand, an overall move to fuel efficiency has become a matter for Capital Hill. The Senate is deliberating on a bill that would force automakers to raise their average fuel economy to 35 miles per gallon (mpg) from the current 27.5 mpg by 2020. If high gas prices or the threat of a struggling planet don't force us to consider more responsible vehicle choices, maybe the nation's lawmakers will leave us no choice.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

It was June. I was a little broke. And my Mercedes SUV, that I'd purchased when I was single, young and foolish, got a flat tire. The tires were ready to be replaced anyway, and there was no "patching." It was dead.

That wasn't all that was wrong; I'd done a mental list of nits and major issues (like, the front windows wouldn't go up or down; the windshield was leaking; the rest of the tires were pretty shot) that added up to between $1500 and $3500, depending on how far I wanted to go. Really, it was $1000 to get the car in working order again.

I had two children, ages four and one. My house was within a few blocks of three bus lines. The whole family had bicycles and we live in a city that values alternative modes of transit. I was starting to really freak out about global warming; would my kids even have wineries nearby by the time they reached the age of consent? The papers said no.

The next day, a friend emailed. "Would anyone like to participate in a car diet?" There were freebies; a bus pass, use of a Flexcar, some goodies for our bike. We handed over our keys a few weeks later in a ceremony, with the mayor and the Channel 8 news crew standing by.