Persistent problems in the petroleum-producing Persian Gulf region has some analysts predicting gasoline prices in Iowa could soon skyrocket. A few reports even project prices will reach $4 a gallon this spring and $5 a gallon by year’s end.
Rose White, spokeswoman for Triple-A-Iowa, says don’t believe everything you hear. “It’s virtually impossible to make any long-term predictions with any accuracy,” White says. “Last year, we did have some analysts basically predicting prices would reach $5 to $7 a gallon but that never did materialize.”
Those analysts gave several reasons for the hike. White says there are issues that impact the price of gas but they are the sort of thing you can’t predict. “Political tensions in the oil-producing countries or workers’ strikes or even pipeline shutdowns due to leakage,” she says.
“Of course, refinery fires and weather issues such as hurricanes or floods and global demand. They all can impact prices, either way.”
Some experts say rising demand for oil will drive prices higher, but White says those people need to look at their numbers again because gasoline usage in America is falling. “Certainly, in the U.S., that just hasn’t held true,” White says. “In fact, demand is down about six-percent from where we were a year ago. A lot of that is due to people just driving differently and operating more fuel-efficient vehicles. Some of the even-predictable factors aren’t easy to predict.”
After seeing a drop in pump prices last month, prices are starting to climb this month. During the first quarter, White says retail prices may go as high as $3.30 to $3.45 a gallon, with ethanol running 12-cents a gallon less. Beyond that, she says her company is making no long-term predictions.