Drought now blamed for rising gasoline prices in Iowa
August 2nd, 2012 by Ric Hanson
Here’s something else to blame on the prolonged heat wave — higher gasoline prices. Gail Weinholzer, spokeswoman for Triple-A-Iowa, says the increase has been gradual, but definite, over the past several weeks of the continuing, blistering hot spell. “In Iowa, as an example, the current average is $3.47, a month ago, it was $3.37,” Weinholzer says. “So, Iowa’s seen about a dime increase in the last month.” The price of gas in Iowa ranges from as low as $3.32 a gallon in Sioux City to as high as $3.49 in Des Moines. The national average is $3.52 a gallon. Weinholzer says there are several reasons for the hike. “One, certainly is the higher global oil prices as well as higher demand because of the busy, summer driving season, along with the higher ethanol prices due to the drought that many areas of the country are seeing,” she says.
As corn plants suffer in the fields from the heat, the price of corn is skyrocketing due to the expected lower supply come harvest time. Weinholzer says gas prices should remain mostly flat through Labor Day but will likely begin to fall in September. “If there’s an increase at all, it will be slight and after Labor Day, we’ll start to see prices decline if everything goes as expected,” she says. Market developments that could change the August forecast include: strengthening or worsening of the global economy, U-S employment data, the hurricane season and geopolitical events in the Middle East.