Experts say gas prices driven higher by economic optimism - KWWL - Eastern Iowa Breaking News, Weather, Closings

Experts say gas prices driven higher by economic optimism

Posted:

IOWA CITY (KWWL) - The price of gas is rising Iowa, but we're still a long way from the pain at the pump drivers were feeling at this time last year. Experts are linking this price hike to something good; they say it's due to optimism that the US economy is turning around, and we may be willing to open our wallets a bit wider.

The prevailing attitude of many Iowans when it comes to current fuel prices seems to be, "I'll take it." Prices have spent several weeks below $2 dollars a gallon, and plenty of people still remember how high they were last Memorial Day.

"The stock market isn't quite to where it was a year ago. But of course at $2.19, we're still better off than we were," said Royce Woodroffe. He's referring to last June, when gas stations were advertising prices near $4 a gallon. "When I was living in Ames last year, I cut down on trips to Des Moines."

So it makes sense that $2.19 a gallon doesn't seem so bad, according to Gail Weinholzer with AAA.

"There's starting to be an increased demand on a global basis for fuel," said Weinholzer. In fact, she says the relatively cheap fuel we're putting in our tanks is encouraging more of us to travel this holiday season, even as it's climbing above $2.

"AAA is projecting a slight increase in Memorial Day travel this year, as compared to last year." Weinholzer says a 1.5% percent increase in travel is nothing to get excited about, but anything is better than 2008.

The recent price increase didn't surprise Lety Kukutschka, who says it was bound to happen sooner or later. "Last year was way to high. But I think right now with the economy and all of the situations we're in right now, it has to be that way."

As for Nick Feauto, "cheap" is still a word that he can say in the same sentence as "fuel," and thinks it's a sign of a brighter economy on the horizon.

"You know, I think it's heading in the right direction, definitely."

Weinholzer says as demand for fuel continues to awaken, we'll see prices rise even more. However, she says it won't be nearly as dramatic as last year's boom.

Online Reporter - Brady Smith

Powered by Frankly