Gas prices climb ahead of big travel weekend

As if on cue with the unofficial start this Memorial Day weekend of the summer road trip and family vacation season, gas prices are going up - and up and up.

Some industry experts forecast the rising gas prices will cut summer travel by close to 25 percent nationwide. But maybe not so much in Iowa, where the average price of a gallon of gas is slightly lower than the national average.

'We really don't see it having an impact on numbers,” said Jessica O'Riley, tourism communications manager with the Iowa Tourism Office. 'I think what we see is people feel the vacation is a birthright and they're going to try to figure out how to do it.”

For some, though, rising gas prices - which have inched closer to $3 per gallon - make it more appealing to hop a bus than fill up a tank.

Jeff Greteman, president of Carroll-based Windstar Lines, which offers transportation from Coralville to Chicago and Des Moines through Megabus, said the bus company often sees ridership increase along with fuel costs.

'We're starting to see more and more travel as the spring and summer season pick up. Typically, the higher fuel prices go, the more ridership we get on our scheduled service,” he said.

According to GasBuddy, a Boston-based organization that manages a database of more than 140,000 gas stations, including fuel price information, the average price of gas in Iowa jumped almost 7 cents per gallon this week, up to an average of about $2.85 per gallon statewide.

The state average was about $2.27 per gallon this time last year, said Patrick DeHaan, head of petroleum analysis with GasBuddy.

'It's been a bit of a bumpy road,” he said. 'This summer is poised to be the priciest at the pumps since 2014, when prices were in the upper $3 per gallon range.”

According to GasBuddy's annual travel survey, 58 percent of respondents said they plan to take a road trip this summer - marking a 24 percentage point drop from the 82 percent who said last year they had such plans. Nearly 40 percent of respondents cited high gas prices as impacting their summer travel decisions.

DeHaan said multiple factors play into rising oil prices - namely production cuts by the Organization of the Petroleum Exporting Countries, or OPEC, which took effect Jan. 1, 2017. And DeHaan said U.S. oil inventories are about 17 percent lower than last year.

'Back to Econ 101 supply and demand,” DeHaan said. 'Demand is certainly very high in light of a strong U.S. and global economy and supply has been curtailed deliberately to drive prices back up.”

In addition to production cuts, oil exports out of Venezuela have been falling - due in large part to ongoing political upheaval there, he said.

DeHaan added that President Donald Trump's decision to withdraw from the Iran nuclear deal could also affect oil prices.

'But that's really contingent on whether or not partners and allies will follow the sanctions that the U.S. is going to be placing on Iran,” he said. 'More sanctions would mean more difficulty.”

According to the AAA, the cost of fuel jumped 12 cents over a two-week span.

'AAA forecasts nearly 37 million travelers will hit the road for the holiday weekend. Compared (with) an average of the last three Memorial Day weekends, pump prices are nearly 50 cents more expensive and climbing,” AAA spokeswoman Jeanette Casselano said in a statement. 'Trends are indicating that this summer is likely to bring the national average to at least $3/gallon.”

At The Eastern Iowa Airport, Director Marty Lenss said fuel prices have not had any immediate effect on fares.

'If we have prolonged higher prices of oil, it will start to trickle into rising fares across the country, but we have not really seen that as of yet,” Lenss said.

He added that the airport is expecting to see the typical busy Memorial Day weekend.

'It's certainly busy. It's not our busiest by any means, that continues to be the Thanksgiving and Christmas time-frame,” Lenss said. 'We'll see some peak leisure traffic, particularly on some of our low-cost carriers.”

Airline industry expert Michael Boyd, who was the keynote speaker at a State of the Airport event there earlier this week, said fuel prices have not had any major industry impacts so far.

'Right now airplanes are making money, so it's not like this will put them under the line,” he said, adding that smaller airplanes, which spread fuel costs among fewer passengers, will feel the effects first.

l Comments: (319) 398-8309; mitchell.schmidt@thegazette.com