Auto v Aviation fuel

murphey

murphey

Touchdown! Greaser!
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murphey
Unleaded around the Denver area is now below $3.00 yet avgas is still above $6.00. This makes no sense. Even the airports that traditionally had "lower" prices are right up there well above $6.00 even $7.00. (except for KFLY and KBJC). I'm beginning to wonder if this is kept artificially higher in anticipation of the higher pricing of unleaded avgas.
 
I think our airport dropped to $5.15/gal and they usually go 60-75cents over cost per gallon, so yes that seems high but each location may have different delivery costs too.
 
I bought avgas in Wisconsin for $4.65 last week. My local field is down to 5.80, which is interesting as they have been well over 7.00 for years. Meanwhile my favorite local fuel stop is still sitting at 5.50. They are usually $2 cheaper than my home field.

It appears to me that higher volume sellers, or those who adjust to the daily spot price, have dropped a lot, while those who only change price with a new tanker load are still sitting at their old price.

I wish I knew of a good way to find out what the spot price is, but short of having a tank to fill and calling the distributor, I don't know of any way to get it.
 
100LL is $4.70 at Okeechobee KOBE. Auto fuel around here (Port St. Lucie, FL) is around $2.89.
 
murphey said:
Unleaded around the Denver area is now below $3.00 yet avgas is still above $6.00. This makes no sense. Even the airports that traditionally had "lower" prices are right up there well above $6.00 even $7.00. (except for KFLY and KBJC). I'm beginning to wonder if this is kept artificially higher in anticipation of the higher pricing of unleaded avgas.
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A lot of price gouging out there. I got the weekly supplier pricing yesterday (Titan Fuels) and it’s down considerably compared to where it was a month or two ago. I suspect national average AvGas prices will begin to come down a bit more if the current trend holds.
 
RyanB said:
A lot of price gouging out there. I got the weekly supplier pricing yesterday (Titan Fuels) and it’s down considerably compared to where it was a month or two ago. I suspect national average AvGas prices will begin to come down a bit more if the current trend holds.
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At what point is it price gouging rather than normal markup?
 
Time for my annual trip south of the border. We’re still sitting at around $10 per gallon north of the border.
 
in my area the aviation fuel price only changes when the airport/FBO buys more fuel. So if nobody has bought fuel for a while I wouldn’t expect to see prices changing just because gas prices at the corner store are.
 
Locally, still mainly in the $6-$7 range with a few in the high $5 area.
 
mondtster said:
in my area the aviation fuel price only changes when the airport/FBO buys more fuel. So if nobody has bought fuel for a while I wouldn’t expect to see prices changing just because gas prices at the corner store are.
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Yep. For some airport managers, it's a frustrating process. They have to make money, or at least not lose it. Once you have a higher price, your sales go down and you don't have room in the tank to get a cheaper truckload in. It can take a long time to lower prices.
 
Lowflynjack said:
Yep. For some airport managers, it's a frustrating process. They have to make money, or at least not lose it. Once you have a higher price, your sales go down and you don't have room in the tank to get a cheaper truckload in. It can take a long time to lower prices.
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Exactly. I owned several automotive gas stations. When there is 25,000 gallons + in the ground and price lowers really can't lower prices until it's sold. I would imagine the volume of av gas sales at some airports would be low and take time to sell off. Would be interesting to know what av gas cost is.

We were working at around 5-7 cents profit but that was some time ago. So, you can see if wholesale price drops 10 cents, would have lost 5 cents per gallon. Hard to stay in business that way.
 
fast99 said:
Would be interesting to know what av gas cost is.

We were working at around 5-7 cents profit but that was some time ago. So, you can see if wholesale price drops 10 cents, would have lost 5 cents per gallon. Hard to stay in business that way.
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As a broad generalization, most FBOs or airports price the fuel at $1 over cost in my area. It seems like there’s always one outlier within reasonable flying distance that does $0.50-$0.75 and tries to make up the difference with volume on their self serve. It seems to work, because the traffic volume always ticks up whenever you’re the lowest price around.
 
This is what happens with no competition.....they set the price....you have no choice but to pay it.
 
Current prices near my neck of the woods. 99N is cheapest 100LL and BNL has the best price on mogas but they are the only one near here that sells mogas ...



Airport / FBO​
100LL
$4.95—$6.99
average $5.86​
Jet A
$4.10—$7.27
average $5.60​
Mogas
$4.64—$4.64
average $4.64​
KBNL​
Barnwell Regional Airport Barnwell, SC​
Phillips 66​
SS​
$5.54​
SS​
$5.60​
SS​
$4.64 ​
​
28-Nov
update​
99N
14 ENE​
Bamberg County Airport Bamberg, SC​
​
Bamberg County Airport
Phillips 66
SS​
$5.38​
​

Edit: A little further from me DNL is at $4.99 for 100LL & 6J4 is at $4.95 ...
 
Lowflynjack said:
Yep. For some airport managers, it's a frustrating process. They have to make money, or at least not lose it. Once you have a higher price, your sales go down and you don't have room in the tank to get a cheaper truckload in. It can take a long time to lower prices.
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Exactly. Prices generally stay the same for the entire shipment. That said, if I buy a split load (4250) at one price and then a few weeks later the price goes down, I may buy another split or a little under a split to start averaging my price.
fast99 said:
Would be interesting to know what av gas cost is.
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The price this week from the supplier is $3.88 and that’s based on a full load of 8500gals.
mondtster said:
As a broad generalization, most FBOs or airports price the fuel at $1 over cost in my area. It seems like there’s always one outlier within reasonable flying distance that does $0.50-$0.75 and tries to make up the difference with volume on their self serve. It seems to work, because the traffic volume always ticks up whenever you’re the lowest price around.
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Ditto. I aim for $1.00 markup at minimum or whatever the local market supports. Sometimes I get lucky and can get a bit more than that, but I’ll do what I have to in order to stay competitive. The margins on Jet fuel are much better than 100LL.
 
murphey said:
Unleaded around the Denver area is now below $3.00 yet avgas is still above $6.00. This makes no sense. Even the airports that traditionally had "lower" prices are right up there well above $6.00 even $7.00. (except for KFLY and KBJC). I'm beginning to wonder if this is kept artificially higher in anticipation of the higher pricing of unleaded avgas.
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Yes, each FBO has a room filled with monitors, charts, and TV screens with ticker symbols and serious men in loosened ties trying to forecast how to wring every last cent of profit from 100LL sales :)

My reality was we would change the price weekly when it snuck upwards, and when costs snuck downwards, we would wait to fill the tank to "reset" -- unless our hand was forced by an on-field competitor. Yes, it would have been more fair to tick down when prices lowered, but, we didn't.
 
I am in the oil business, since 1983.
Split loads cost more than a full load 7500.
Pick your poison.
Like said if you got a half a tank of high priced fuel would you want sell it for a loss?
Sometimes I do blend with cheaper fuel but it is still a loss. It goes both ways.
There is no one right way to do it. Always a gamble no matter what.
My wholesale fuel prices change 5 days a week at 6 pm.
I own 2 bulk plants but they are not aviation 100LL.
Have sold many transport loads of JetA fuel for kerosene heaters in years past..
Our 100LL went down to $5.51 from 6.00 about 2 weeks ago.
In 2015 when I started buying 100LL is was $3.75 gal at my airport.
 
To the OP: when has auto fuel prices at your local gas station ever tracked with avgas prices?
 
Prices are coming down, just more slowly than auto gas. They peaked a couple months ago and the FBO's are working off that inventory. Give it a couple months and it will be lower still, absent another crude price shock.
 
mondtster said:
As a broad generalization, most FBOs or airports price the fuel at $1 over cost in my area. It seems like there’s always one outlier within reasonable flying distance that does $0.50-$0.75 and tries to make up the difference with volume on their self serve. It seems to work, because the traffic volume always ticks up whenever you’re the lowest price around.
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Yep, $1 per gallon is fairly typical. FBOs/airports are a lot smaller volume and higher overhead than your typical auto gas station, and also don't have the concession profits to make up for the fuel profits.
 
mondtster said:
in my area the aviation fuel price only changes when the airport/FBO buys more fuel. So if nobody has bought fuel for a while I wouldn’t expect to see prices changing just because gas prices at the corner store are.
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That's certainly fair. Do they do the same and keep their price low when market prices rise and they still have cheap gas in their tanks?
 
Bob Noel said:
To the OP: when has auto fuel prices at your local gas station ever tracked with avgas prices?
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Never, but also never this large a difference (other than Class B airports)
 
Lindberg said:
That's certainly fair. Do they do the same and keep their price low when market prices rise and they still have cheap gas in their tanks?
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The price usually remains the same until the next load comes in. Of course, that means that it will be gone fast if there is a big price increase and you’re the cheapest in the area.

I do know that there are some that will make a slight increase to make a bit more money when prices are on their way up so they have some cushion for when they have expensive gas and prices are on their way down. But I don’t know of any local operators that are into price gouging.
 
Lindberg said:
That's certainly fair. Do they do the same and keep their price low when market prices rise and they still have cheap gas in their tanks?
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Depends what the market permits. If the local average goes higher and better margins can be had, it’s totally fair.
 
How much is the cost of jet fuel? I already saw it’s much cheaper than 100LL so if margins are better are airports getting it in the $2.xx range?

The club I fly at usually buys 5000gal at a time and they share the actual cost price if requested, but once they buy that fuel, the price is locked in until another fill up so they aren’t making a loss, which makes sense.

I’ve heard that many auto fuel stations don’t earn much on fuel (some break even), they want to get you there to buy their overpriced items inside the store. I rarely go inside when going to an auto fuel stop though. But a lot of in and out traffic, these days if you go in you’ll easily spend $10-20 on something that probably costs the store $2-3. Multiply that by the number of in and out traffic, and those who don’t buy helps the gas station turnover fuel to get better prices I’m guessing.
 
Hang 4 said:
Prices are coming down, just more slowly than auto gas. They peaked a couple months ago and the FBO's are working off that inventory. Give it a couple months and it will be lower still, absent another crude price shock.
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Despite popular belief, AvGas prices actually move about as quickly as auto gas. The issue is, gas stations turn over fuel a lot faster than airports do, so price changes reflect a lot faster. I’ve seen 100LL prices decrease nearly .50c one week and another .25c - .30c the next and it was about the same time that pump gas took a noticeable dive.
 
mandm said:
How much is the cost of jet fuel? I already saw it’s much cheaper than 100LL so if margins are better are airports getting it in the $2.xx range?
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Right around $3.00/gal this week.
 
RyanB said:
Despite popular belief, AvGas prices actually move about as quickly as auto gas. The issue is, gas stations turn over fuel a lot faster than airports do, so price changes reflect a lot faster. I’ve seen 100LL prices decrease nearly .50c one week and another .25c - .30c the next and it was about the same time that pump gas took a noticeable dive.
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That's pretty much what I said, it takes longer for prices from the refinery/terminal to be reflected in pump prices in av fuel as compared to auto gas.
 
I saw the same thing with marina gasoline. It was $5.29 in early November, same as it had been all summer.
 
I may not like it, but it makes sense. Cost is driven by economy of scale. Price is driven by competition. Auto gas has orders of magnitude advantage over Avgas in both volume and competition.

If you want hard numbers in the US, Avgas sells about 400 thousand gallons per day, while auto gas sells 370 million gallons per day. Almost a thousand times more.

And there are probably more gas stations in my city (Tampa) than there are airfields in the entire country. Gas stations are frequently directly across the street from each other, or side by side. In such a hyper-competitive environment, price will be extremely market sensitive, down to the last penny.
 
Avgas is a low volume item (compared to automotive fuel), and is only made a few times a year, so there may be a significant lag in price changes, and of course there is less volume-based economy in its production. In the northeast, I think all our fuel goes to depots in either Philly or Montreal, and is shipped by barge.
 
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