Will Avgas prices EVER come down?

N5922S

N5922S

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N5922S
Oil prices have been falling for quite a while now and gasoline prices have followed suit (over 50 cents/gal so far here), but I can't find a single airport that's come down a single penny.

I realize that they have to sell existing inventory before changing prices, but apparently no one in Texas has bought a new load in the last month :no:

Is there a source of info about wholesale avgas market price? :dunno::mad2:
 
Got a crystal ball? Who knows?

However, if there is more certainty in the financial, and commodities markets as well as less onerus regulation and rhetoric in the energy sector. MAYBE.
 
They sell less of it, so maybe they have to move what is in the tank at the old price. Or maybe they just found a new price point pilots are willing to pay.
 
AvGas prices typically lag about 6 months behind car gas prices. When car gas first hit $4/gallon a few years ago, there was a period when I could purchase AvGas at my local airport for about the same price as premium unleaded for my Jaguar. Then it went up to where AvGas was about 2x the cost of regular.

Typically what ends up happening is airports will buy a batch of AvGas and price it according to the price of that batch. They have their markup, whatever it is, and probably won't adjust that much. Because of this, the price can vary overnight by quite a bit. I've had the price jump at the same airport $1 over the course of a weekend - the got a new batch of fuel.
 
Ted DuPuis said:
Typically what ends up happening is airports will buy a batch of AvGas and price it according to the price of that batch. They have their markup, whatever it is, and probably won't adjust that much. Because of this, the price can vary overnight by quite a bit. I've had the price jump at the same airport $1 over the course of a weekend - the got a new batch of fuel.
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That is exactly how our FBO does it. Does give one the chance to hedge a bit if they allow pre-payment for a fixed number of gallons.

Gary
 
N5922S said:
I realize that they have to sell existing inventory before changing prices, but apparently no one in Texas has bought a new load in the last month :no:
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Why is that? I suppose there could be a law. But there is no other reason they would have to. If the market price drops, it's better for the retailer to get some money than no money. Then they can buy a bunch of cheap gas wholesale and sell that at the market price to make back some profit.

If its not going down in price, it's because the market simply hasn't forced them to, or the FBO manager isn't paying attention enough to maximize profits.
 
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Where in the state are you? We have seen a few modest drops around here... down to $4.58 at Sherman. That's a start.
 
Another factor to keep in mind is that fuel sales are where most FBOs make most of their money. This is part of why you go to a larger FBO and the fuel costs that much more - that's how they pay for the extra facilities they have.

I can't say much for how those FBOs choose to mark up their fuel, and if they change it to reflect market conditions. I mainly choose to go to FBOs that have minimal facilities and self-serve fuel. It's cheaper.
 
My guess is essentially "no". Prices may fluctuate downward at tmes, but the general slope of avgas price will remain upward until it stops being manufactured in the relatively near future.
 
Your premise is flawed, at least in this area. The cheap fuel within 100 nm of Dallas is mostly self-serve. In many cases it is sold by the city/county/airport authority that operates the airport as a service to constituents and to provide a revenue source to the owners.

In some cases the local FBO/Maint facility administers the operation for a fee, but the fuel is bought and the pump/tank facilities are owned by the airport authority.

They aren't interested in any of the economic or marketing theories other than making a profit on the fuel they pump. They buy a tankload, set the price accordingly, and do it again when necessary.

PPC1052 said:
Why is that? I suppose there could be a law. But there is no other reason they would have to. If the market price drops, it's better for the retailer to get some money than no money. Then they can buy a bunch of cheap gas wholesale and sell that at the market price to make back some profit.

If its not going down in price, it's because the market simply hasn't forced them to, or the FBO manager isn't paying attention enough to maximize profits.
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wabower said:
Your premise is flawed, at least in this area. The cheap fuel within 100 nm of Dallas is mostly self-serve. In many cases it is sold by the city/county/airport authority that operates the airport as a service to constituents and to provide a revenue source to the owners.

In some cases the local FBO/Maint facility administers the operation for a fee, but the fuel is bought and the pump/tank facilities are owned by the airport authority.

They aren't interested in any of the economic or marketing theories other than making a profit on the fuel they pump. They buy a tankload, set the price accordingly, and do it again when necessary.
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They may not be paying close attention, and they may not be setting the price at the point that maximizes profit, but they must give some consideration to market forces.

Ask yourself why they don't simply triple the price the charge. They would increase their profit per gallon, right.
 
PPC1052 said:
They may not be paying close attention, and they may not be setting the price at the point that maximizes profit, but they must give some consideration to market forces.

Ask yourself why they don't simply triple the price the charge. They would increase their profit per gallon, right.
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This, then, would qualify them for service in congress.
 
write-stuff said:
My guess is essentially "no". Prices may fluctuate downward at tmes, but the general slope of avgas price will remain upward until it stops being manufactured in the relatively near future.
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While I agree that the overall trend will be upward in price, it's been the same for everything else in this world.

And while 100LL will be going out of fashion, it's got some life left in it. It's not going to cease production tomorrow.
 
Yes, the day it is no longer produced and the existing supply runs out! Until then, people and companies will continue to increase the price of it.
 
SCCutler said:
Where in the state are you? We have seen a few modest drops around here... down to $4.58 at Sherman. That's a start.
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Tyler area. About 2-3 months ago, KRFI was $4.09 and 3F3 was $3.60. Their prices understandably jumped as oil peaked, but have not come down since. I'm sure the FBOs aren't gouging, but wholesale prices are sticking. :mad:
 
write-stuff said:
My guess is essentially "no". Prices may fluctuate downward at tmes, but the general slope of avgas price will remain upward until it stops being manufactured in the relatively near future.
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Excuse me for a moment while I slash my wrists. :(
 
N5922S said:
Excuse me for a moment while I slash my wrists. :(
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You might require a special issuance next medical if you do that.
 
Wholesale prices are trending back down but if I bought a load now, my price would still go up. I bought on the way up and had/have enough to have ridden out the price peak.

I don't know what others do but we have a standard mark-up and a target price range relative to others within 100NM radius. We monitor 100LL and will bump price up or down when we hit the limit of our target range. We stay below the median for full service and higher than 1/4 of the airports in that area. Our standard mark-up usually has us there without adjustment. We have better facilities than many and don't try to compete with self service.

Many of our pit stop customers stop the first time because they needed fuel and we were close. After the first stop, we become a planned stop for many.
 
PPC1052 said:
Ask yourself why they don't simply triple the price the charge. They would increase their profit per gallon, right.
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and that place is called Signature.
 
Arbiter419 said:
N79! Looks like Bloomsburg is a little cheaper for once. Haven't been there for a while now.
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I'll sometimes stop there on my Houston -> MA/ME dog flights because of the cheap fuel. N13 I don't like since they're Full Serve and closed during most of the hours I fly. Either case, one is well advised to avoid flying there at night unless you know the terrain, and even then...

The problem with flying there to get fuel is that I don't go there for other reasons, and by the time you factor in the cost of taking the airplane out of the sky or making a dedicated flight, it offsets any savings. So I still end up buying fuel here at IPT at the start of a trip.
 
Needed to fly today so I buzzed down to TKX (kennett, mo) & filled up with $4.69 100 LL. They're always the cheapest in our area. It's about a 40min flight but when you need/want to fly anyway...
 
PPC1052 said:
Ask yourself why they don't simply triple the price the charge. They would increase their profit per gallon, right.
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Yes, and get them fired immediately. What would you do?
 
N5922S said:
Tyler area. About 2-3 months ago, KRFI was $4.09 and 3F3 was $3.60. Their prices understandably jumped as oil peaked, but have not come down since. I'm sure the FBOs aren't gouging, but wholesale prices are sticking. :mad:
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Welcome aboard.

Opportunity, she's a-knockin'!

www.GastonsFlyIn.com

Coming right up, and an easy hop from Smith County!
 
Stability, and certainty gentlemen. Stability and certainty. Until we get a bit more of both, the sky is the limit. It won't happen when we have energy and environmental policy that gives us neither.
 
Down about 0.20 / gallon at T82 since my last visit three weeks ago.

Data point.
 
What I like is that as soon as wholesale prices jump, the hike the price and say they have to charge ased on the "replacement cost," but when prices decline they say they have to recoup what they've already spent on it.
 
I have noticed as I drive by the two refineries near here that a week ago the tanks were all full of product. Wed. this week I saw the bay full of tankers, all with Japan and China markings, and as of last evening the product storage tanks are nearly empty, and the tankers are gone.

Draw your own conclusion, but mine is the refineries will sell product where they can get the highest price.

OBTW,, the tanks have floating lids, you can tell when they are full, and when they aren't.
 
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I've seen the price come down some, but it isn't as low as it was just a few months ago.
 
I believe it's also important to consider the buying power of the dollar as well as supply and demand of crude when we are talking about fuel prices. Printing money has hurt us at the pump and and will continue to do so for the foreseeable future.

http://www.mongabay.com/images/commodities/charts/crude_oil.html

Demand is growing, but look at the chart, not that fast.
 
Fuel prices are strange.

While in KLNK I noticed their Auto gas prices were significantly lower than Denver, but their AvGas prices are significantly higher.
 
denverpilot said:
Fuel prices are strange.

While in KLNK I noticed their Auto gas prices were significantly lower than Denver, but their AvGas prices are significantly higher.
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Much of that disparity could be state taxes and airport "flowage fees".
 
denverpilot said:
Fuel prices are strange
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No, the commodity market is strange, If the buyer of commodities were required to take custody of the product, they couldn't set on the market and wait until the price goes up.

And that not only applies to oil, it applies to wheat, soybeans, etc.

If congress passed that law, the hedge fund managers would be jumping out of windows.
 
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To add insult to injury, my home airport (KJSO) just INCREASED the price by 19c/gal. Git a rope. :mad:
 
Tom-D said:
No, the commodity market is strange, If the buyer of commodities were required to take custody of the product, they couldn't set on the market and wait until the price goes up.

And that not only applies to oil, it applies to wheat, soybeans, etc.

If congress passed that law, the hedge fund managers would be jumping out of windows.
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I wouldn't mind seeing that rule myself. :thumbsup:
 
rpadula said:
http://www.reuters.com/article/2012/05/25/uk-gasoline-usa-prices-idUSLNE84O00Y20120525
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Yeah, mom's been in the crude pipeline biz for 30 years... I know the refineries and the pipelines and such, well. (I also worked for Texaco for a couple of years in the early 90s.)

The part I didn't understand was the split between AvGas and MoGas in LNK. It's wide. Part of it is the FBO making a profit, that's fine... but even at cheaper surrounding smaller airports, it was still fairly high.

Denver is a little world unto itself... but it does crack me up when people are MoGas brand-loyal here... it's all coming out of the same refinery, for the most part. (There's some finished product pipelines into and out of town, but they don't meet even 15% of the city's needs even after a new one was laid from Wyoming down to here...)

Want to screw up Denver bad? Shut down the Sunoco (formerly Conoco) Refinery... :(
 
SCCutler said:
Where in the state are you? We have seen a few modest drops around here... down to $4.58 at Sherman. That's a start.
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On the other side of the coin, Gaston's is currently $7.59! Millionaire at KADS would probably be less expensive.
 
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