An Iowa Department of Natural Resources analyst says the price of gas went up slightly in the past month, but a lot more movement isn’t expected in the near future. Tommi Makila says there’s one thing that’s keeping the gas prices where they are.
“Right now the economy is really the major factor, it’s really overriding all the other factors, for example, the oil producing countries have been cutting their output in an effort to make the prices go a bit higher,” Makila says.
But he says the economic slowdown has overridden those attempts to bump up the price. The average price of a gallon of unleaded ethanol gas went up 18 cents in the last month to $1.78 a gallon. The average price of a gallon of diesel fuel went down 11 cents. Makila says oil supply and demand usually dictate what’s happening with the price, but not at this point.
He says there’s less economic activity with less shipping, and with people being laid off, there are fewer people commuting– which lowers demand. Makila says the lower prices haven’t made much difference in demand and supply. He says another factor is the mindset of motorists — which may’ve changed after gas prices soared.
“Maybe that when we did see the four dollar gas last year, I think a lot of us might have learned our lesson,” Makila says. He says it seems when he talks to people they don’t expect the low gas prices to last and have changed their habits a bit to use less gas all the time.
The average price of gas in the January survey was down 40% from January of last year when the average prices was $2.97 a gallon.