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As the economy slowly begins to improve, economic activity is starting to pick up across the country. Yet, some significant headwinds could derail the budding recovery before it ever manages to pick up steam, specifically, the impact of high gas prices. In fact, gasoline is quickly approaching a nationwide average of about $4/gal. with some state averages already hitting the key level.

This surge in prices has been brought about by a few key factors. First, the price of crude has jumped in 2012 as well, trickling down into a gasoline price jump too. This has been caused in part by the improved economic situation in the U.S. and parts of Europe but also tensions with key markets in the Middle East. Fears of an Iranian conflict continue to dominate the headlines and issues over sanctions and export bans have already begun to rile the oil markets, helping WTI to maintain a level over $100/bbl. (also see ENY )>A Closer Look At The Canadian Energy Income ETF ).

While this trend seems poised to hurt consumers and the general public at large here in the U.S. investors can easily benefit from these trends. Broad energy ETFs have also seen gains in this time period while oil focused equity ETFs are also easily beating the market. Yet, while these are all decent choices for those seeking to play a trend in higher prices at the pump, arguably the best, and most direct, way to do this is with the United States Gasoline Fund ( UGA ) .

UGA allows investors to directly make a play on the commodity of RBOB gasoline without the use of futures accounts. The fund tracks the changes in percentage terms of its units’ net asset value to reflect the changes in percentage terms of the price of gasoline. This is measured by the changes in the price of the futures contract on unleaded gasoline traded on the NYMEX that is the near month to expire, except when the near month is within two weeks of expiration. When that is the case, the next month’s contract will be used instead. It is also worth pointing out that the investment will be collateralized with short-term U.S. treasury bills, all of which will have a remaining maturity of two years or less (read Inside The Forgotten Energy ETFs ).

Currently, the product charges investors 60 basis points a year in fees and has about $100 million in AUM. Average daily volume comes in at about 60,000 shares a day while the average bid ask ratio is just 0.1% putting it in the top 20% for its category on this metric. This suggests that total costs for this fund will be relatively low and that investors should be able to find trades at the price point they are seeking in the market (read Market Vectors Launches Unconventional Oil And Gas ETF ).

Yet, for investors looking to gain targeted exposure to gasoline in ETF form, the product is the only choice available at this time. Given that gasoline prices seem to be on the rise, this could be the way to go, especially over products that have more of a focus on ever-weak natural gas instead. So while no one knows what the future will bring at the pump, higher prices seem likely. The economy appears to be on the mend and tensions with Iran are likely to reach a fevered pitch over the next few months. Thanks to these situations, UGA could be an interesting pick for investors looking to make a concentrated play on the gasoline segment of the energy market. The fund could potentially add to its robust year-to-date performance figures which are already at 17%, far outpacing both broad markets and more diversified energy ETFs in this time period.

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