There’s fear of potential “panic buying” of gasoline in Iowa over the next few days as pump prices will rise a dime a gallon on Sunday, thanks to legislators and the governor passing an increase in the state fuel tax.
Rose White, with AAA-Iowa, says there may be a boost in sales at gas stations and convenience stores through Saturday, especially in metro areas along state borders like Sioux City, Omaha/Council Bluffs and the Quad Cities.
“Certainly with the change, there may be some impacted, specifically along the Missouri border as that difference will be almost 15 cents a gallon,” White says. “The other states however, the variances will be minimal.” With the higher tax, Iowa’s gas prices will be about three cents higher than Minnesota, a penny higher than Illinois, six cents higher than Nebraska, and a dime a gallon higher than South Dakota. Wisconsin is the only border state where gas prices will remain higher that Iowa, by about a penny.
The increase of ten cents a gallon may not seem like much, but it can add up. Still, White says to resist the urge to dash out and fill your tank. “We do encourage motorists not to participate in any panic buying just to save ten cents a gallon,” White says. “Instead, we just encourage you to not deviate from your normal fuel purchasing. If a lot of people do go out and buy fuel this weekend, that could actually create some shortages and we certainly do not want that to happen.”
Some gas station owners in Iowa border cities may face a financial squeeze due to the new pricing structure. “Many of them may have to lower their profit margins just to stay competitive, especially along that Missouri route,” White says.
The 15-cent difference between Iowa and Missouri is nothing compared to disparities elsewhere. The gas in New Jersey, for example, is 36-cents lower than neighboring Pennsylvania. This is the first hike in Iowa’s gas tax since 1989, a move that’s expected to generate 215-million dollars a year to benefit road and bridge construction and repairs.