Iowa gas prices that leaped as much as 20-cents a gallon after recent terrorist bombing in London show no sign of going back down. Dawn Carlson, president of the Petroleum Marketers of Iowa, says crude oil is the biggest factor in the cost of gasoline. Since 1983, Carlson says crude-oil futures have been traded in a forum called NYMEX, the New York Mercantile Exchange, and she says “We’re actually trading two and-a-half times our daily needs for gasoline and diesel fuel, so we’re kind of at the mercy of the fund managers at NYMEX on what’s going to happen with the price.” “When we see things like the London bombings, threats of hurricanes and other issues,” Carlson says, “it makes the fund managers go crazy.” She says trading increases and the market’s volatile. “It’s a shell game, you don’t know whether they’re going to go up or down depending on what’s happening in the world markets.” Still, when Iowa retailers raised the price at the pump, they had storage tanks full of gas they’d already purchased at a lower price. The reason, she says, is “You have to figure what your replacement cost is.” She says retailers used to get their price adjustments from their suppliers, the major oil companies and refiners. They used to get their prices by mail, once a week. Now with faster technology they come by fax or computer daily, and now they’re coming every hour, or at least several times a day. She says the retailers have to keep up with a market that changes depending on markets, weather and other issues. She says operators have to grapple with all that information as well as the cost from their suppliers, as they make daily decisions on what they’ll charge Iowa motorists for gasoline.
