The average price of one gallon of gas in the state was up five cents, according to the latest state survey, with the average price at $218. Iowa Department of Agriculture fuels analyst Harold Hommes says the main factor driving the price right now is the cost of oil.
“It’s kind of following in step with what we’ve seen. If you think back here a week or two ago, we were down as low as $45 a barrel, 44 and-a-half I think on West Texas Intermediate, which is considered the benchmark,” Hommes says. “We’ve crept back up to 52 bucks a barrel — and depending on which direction that moves — I think gasoline is going to follow pretty closely in step with crude in the near future.”
Competition also has some impact on the gasoline price, which can push it up or down a little. “The state average is currently at 2.18 and here in central Iowa…and in most areas around here, I think we are slightly below that even,” Hommes says. The cold weather has kept demand for gasoline down, which is another factor in the overall price.
“We do see a real slump in demand at this time and right now we’ve got quite a supply available. So, it’s certainly keeping a lid on prices,” Hommes says. Just about one month ago the statewide average was below $2 for a gallon of gas. But even with the recent increase, Hommes says it’s much better than what motorists paid last year at this time. “These are still very, very reasonable values for the consumer,” Hommes says.
The average cost for a gallon of gas one year ago was $3.31. The survey uses unleaded gas with 10 percent ethanol as its baseline for prices.