Experts: Cost of filling gas tank will rise, slowly, as year goes on

Eastern Iowans can expect to see gasoline prices rise as the summer driving season approaches, but the cost of filling up probably will be less than it was last year.

The average price of a gallon of regular unleaded gasoline Monday was $1.98 in Cedar Rapids and $2.10 in Iowa City, according to GasBuddy.com. Statewide, the average price was $2.05 per gallon — a penny lower than the national average.

That increase is in sharp contrast to the $1.63 per gallon it was Feb. 9 in Cedar Rapids and Feb. 13 in Iowa City, GasBuddy.com shows.

Nonetheless, gas in Iowa is about 30 or 40 cents a gallon cheaper than in the same time period a year ago.

That the prices have not surpassed those from a year ago has kept many drivers from fixating on the rapid increase in the last few weeks.

For Sara Sheldon, who delivers for gourmet sandwich shop Jimmy John's in downtown Cedar Rapids, other expenses command more of her attention. She said her car has broken down a handful of times on the clock.

'This job is tough on your car,' she said. But her Nissan Sentra averages 27 miles per gallon n town.

'I put about $5 to $10 of gas into my car a day — not a lot,' Sheldon said. 'I don't notice the price of gas too much.'

Drivers for the sandwich shop get paid a fixed rate regardless of the fluctuations, another driver said.

'We pay for our own gas, however, we get a DMR, which is a driver maintenance reimbursement. That gives us 5 percent of our sales,' said Tiffany Van Tomme, who has delivered for the shop at 411 Third St. SE for three years. 'Let's say I make $100 in sales in one day, and I would get $5 in my pocket toward my car.'

On a typical day, she makes up to 20 deliveries and sometimes 50 on Saturdays. The store has a service radius of about a mile, which means that she drives an average of about 50 miles each workday. Van Tomme said her 2002 Toyota Camry gets 17 mpg in town.

The rapid price increase has leveled off in recent days but likely will tick upward as that nation's oil refineries undergo maintenance this spring and summer, said Patrick DeHaan, a senior petroleum analyst for GasBuddy.com.

'We really haven't seen the bulk of that maintenance get underway, based on weekly reports from the U.S. Energy Information Administration,' he said. 'I would surmise that as refiners get into the prime of their maintenance season, we likely will see refinery utilization rates drop. That means less gasoline will be produced, which will put more upward pressure on prices than we have seen.'

And DeHaan said Midwest refineries have 'plenty of maintenance scheduled.'

But Harold Hommes, a fuel analyst with the Iowa Department of Agriculture and Land Stewardship, said refinery maintenance and the transition to summer blends of gasoline probably won't cause big price spikes.

'I don't see any kind of a spike looming, even in the summer months,' Hommes said. 'Last fall, we had the brief spike for two or three weeks when the BP Whiting Refinery in Indiana went down. Those things can happen, but barring something of that nature, I'm doubtful that we will see $2.50 a gallon this summer.'

DeHaan said the price of Middle East oil could influence gasoline prices. He cited last week's comments by a Saudi Arabian prince dismissing a freeze on crude production without the participation of Iran.

'This is a modern-day Hatfields and McCoys,' DeHaan said. 'Iran wants to raise its crude output and exports until it reaches pre-sanction levels. The Saudis do not want the price of oil to go too high because it would empower its neighbor — Iran.'

DeHaan said the Saudi economy, which was dependent on $100 a barrel oil, has taken a hit as crude plummeted below $40 a barrel.

'The Saudis need to make a choice,' he said. 'They either have to allow Iran to profit greatly from higher oil prices or be willing to slash what they're willing to live on. At this point, I think they would rather have a weak Iran and a weak economy of their own.'

The Organization of the Petroleum Exporting Countries and other major oil producers are to meet in two weeks in Qatar to discuss freezing production and, as a result, driving up prices.

But analysts said prospects for a deal are dimming. The Saudis are declining to rein in output and Russia is reporting its highest oil production in 30 years.