Fuel prices expected to level off - KWWL - Eastern Iowa Breaking News, Weather, Closings

Fuel prices expected to level off

DES MOINES (KWWL)-- According to the Iowa Department of Natural Resources, fuel prices have declined further in the last month, but markets are showing signs that prices may be leveling off.

On Dec. 16th the average price of 10% ethanol blended mid-grade gasoline in Iowa was $1.60 per gallon, making it 43% lower than the December 2008 price of $2.82 per gallon of the same blend.

"Prices can only go so low. Production cuts that have been made in response to low prices will eventually tighten the supply and demand equation and drive prices up," said Tommi Makila, Iowa DNR Energy Policy Analyst. "I suspect current low prices are a temporary aberration.  When the global economy recovers, we will surely see higher prices. We should not forget the lessons we learned when gasoline was four dollars per gallon."

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