Gas prices are below $3 a gallon across the metro and they’re the lowest prices we’ve seen in the past three years.
Local experts predict they’ll remain low for the next few months.
Drake University’s associate professor of finance, Tom Root says there’s a number of factors driving the price down.
First, refineries are switching to the winter blend of gas.
“As we go to a winter blend on gas, it’s cheaper to produce and that causes kind of a seasonal fluctuation that we always see in the fall,” Root says.
Second, we’re seeing a decrease in demand because of the poor global economy. In good times, people use more gas not just for trips and vacations, but also for building and purchasing materials.
“When we think about fast growths that we’ve had in the past when China was growing at 10 or 15-percent and Europe was growing fast and emerging economies like Brazil were growing, gas prices were growing because of that growing price for oil.”
Third, the US is becoming more energy independent. Less exported oil means fewer transportation costs.
“[The US is] importing less and is able to use more locally produced and domestically produced fuels,” Root adds.
Lots of corn means lots of ethanol in Iowa. “That helps definitely with transportation costs and does lower when you think about getting that break with ethanol prices a little also for us,” Root says.
Experts believe this drop in prices should last for the next several months.