What's new
Van's Air Force

Don't miss anything! Register now for full access to the definitive RV support community.

AvGas Prices

Michaelpk3

Well Known Member
I just paid $1.72 (about half of what it was a month ago) per gallon in Dallas for my truck. I filled up my airplane a day ago and AvGas only went down 12 cents. Why aren’t AvGas prices following auto fuel prices?
 
Last edited:
If you only paid $1.72 on your last fill up of avgas I'd say you are doing pretty well. I paid more than 3 bucks for car gas yesterday.
 
Mike,
I'll paraphrase my cousin the petroleum engineer, so this will sound like a fairly simplistic answer but it is the accurate answer.
MoGas (motor vehicle gasoline) is a mass-produced and mass-consumed product, subject to the supply-demand fluxuations of a market and consumer economy.
Avgas is produced in extremely low quantities compared to MoGas, and only at a very small handful of refineries. It is considered a boutique fuel in the petrochemical industry. As such, it's set output and consumption is more consistent, and thus, so too its cost and price. She said the prices ought to drop a little, but not in pace with the more active MoGas consumer market.
 
Mike,
I'll paraphrase my cousin the petroleum engineer, so this will sound like a fairly simplistic answer but it is the accurate answer.
MoGas (motor vehicle gasoline) is a mass-produced and mass-consumed product, subject to the supply-demand fluxuations of a market and consumer economy.
Avgas is produced in extremely low quantities compared to MoGas, and only at a very small handful of refineries. It is considered a boutique fuel in the petrochemical industry. As such, it's set output and consumption is more consistent, and thus, so too its cost and price. She said the prices ought to drop a little, but not in pace with the more active MoGas consumer market.

Another issue here as well. Most auto gas is supplied to the retailer without a fixed cost. T retailer's cost of that gas can be changed daily, as the suggested retail price is changed to meet market conditions (retailers send in daily gallons sold figures and their cost is accrued, based upon that day's cost figures). This varies a bit, as some only receive a profit from the gas sold and don't actually pay for the deliveries. Most FBO's must pay for their shipment when the fuel is delivered. Therefore, they are somewhat locked into their retail price until the next delivery. THerefore, we see much slower reaction to changes from the refineries increases or decreases. It pays to shop more aggressively when gas prices are moving because of this.


Larry
 
Last edited:
Another issue here as well. Most auto gas is supplied to the retailer without a fixed cost. T retailer's cost of that gas can be changed daily, as the suggested retail price is changed to meet market conditions (retailers send in daily gallons sold figures and their cost is accrued, based upon that day's cost figures). This varies a bit, as some only receive a profit from the gas sold and don't actually pay for the deliveries. Most FBO's must pay for their shipment when the fuel is delivered. Therefore, they are somewhat locked into their retail price until the next delivery. THerefore, we see much slower reaction to changes from the refineries increases or decreases. It pays to shop more aggressively when gas prices are moving because of this.


Larry

Larry,
Thanks! That actually explains for me how MoGas prices can change so much day to day (or even hourly).
 
Mike,
I'll paraphrase my cousin the petroleum engineer, so this will sound like a fairly simplistic answer but it is the accurate answer.
MoGas (motor vehicle gasoline) is a mass-produced and mass-consumed product, subject to the supply-demand fluxuations of a market and consumer economy.
Avgas is produced in extremely low quantities compared to MoGas, and only at a very small handful of refineries. It is considered a boutique fuel in the petrochemical industry. As such, it's set output and consumption is more consistent, and thus, so too its cost and price. She said the prices ought to drop a little, but not in pace with the more active MoGas consumer market.

In addition to what you have stated, I think a significant factor is the lack of competition and related market dynamics. In the auto world, there is a station on every corner and most would select the lowest priced option if all of the suppliers did not move their prices in concert. The gasoline industry learned this MANY decades ago. Decades of effort trying to build a brand to differentiate upon, yet still must be within $.02 of the guy next door to avoid volume losses. Most airports have one retailer and it is not easy to just fly another couple of blocks to the next station. Further, most pilots prefer to refill after each flight at the home base, which typically has only one avgas option. All of this minimizes traditional demand dynamics and keeps the suppliers from agressively competing with one another on price. They simply don't need to reduce margins to avoid lossing sales. By they, I mean the suppliers not the retailers. We all see the occassional retailer selling gas for $.25 less than everyone else, but most retailers realize they generate more income by holding margins eventhough they lose a bit of volume to lower cost outlets. They know that most pilots won't divert to save a few quarters. The limited number of avgas suppliers only compounds the issue.

I can't quantify any of this, but believe it is large reason why avgas is so much more than auto fuel, in addition to the boutique nature you described. I further speculate that avgas price has little effect on demand, unlike auto gas, and removing another incentive for reducing margins as that would not likely spur additional volume. Suppliers will hold the price at whatever critical level that they believe will begin to alter demand enough to negatively impact gross margins from reduced volume.

Larry
 
Last edited:
Vermont / Upstate NY

Just paid $5.22 at DDH, a Vermont state airport. The nearby Cambridge Valley Flying Club at 1B8 is charging $4.35 for club members only - based on price of last on-field tank fill back in September. We'll be due a refill soon ready for spring flying - so hopefully will see the benefit of low crude prices. But who knows?
 
On the flip side, I just paid CAD$1.04/litre for premium mogas for the airplane. This is down from the CAD$1.31-1.39/litre that we've been paying for most of the winter. Still, given world oil prices we should be paying about CAD$0.70/litre, so the oil companies are riding hard that old horse that says "fast up, slow down".
 
Just paid $5.22 at DDH, a Vermont state airport. The nearby Cambridge Valley Flying Club at 1B8 is charging $4.35 for club members only - based on price of last on-field tank fill back in September. We'll be due a refill soon ready for spring flying - so hopefully will see the benefit of low crude prices. But who knows?

Jim, you need pop over to CNH or 3B3. $4.38 there.

As long as I've been Flying... 32+ years, Av Gas on average has been about about 2x what I pay at the pump for my car. This has been true for the places I've lived - South Carolina, Michigan, and the North East. Just seems that's the way it is.
 
The refinery where I work would make more money turning gasoline into crude oil if that was possible.
Incidentally I had a nightmare last night that avgas prices dropped to under $1/gallon but the pump broke and I couldn?t fill the tanks. Analyze that :confused::confused::eek:
 
You guys ought to be grateful you have such cheap fuel!
Down under we pay around $8 bucks a gallon (US gallon) and as high as $12 buck a gallon in remote places!
 
Another bit of info....
Florida....we bulk buy (3000-5000 gals) for delivery to our private airstrip. Everyone has their own tanks (100-500) that we gather on fuel day. A volunteer handles the tanks fueling, etc.
Price is normally $1.00 more than what regular is locally.
Now, $2.08....for regular.
R
 
FWIW, I track fuel prices in Canada (www.100ll.ca) and have seen a decrease in prices over the last month or so. I was told this morning by one of my regular contributors that "significant" decreases are expected in the near future as well. He didn't elaborate as to what constitutes "significant".
 
I don?t pay much attention to the price of fuel. The cost of hangerage around here dwarfs the price of fuel in terms of overall operating costs. I refuse to keep my airplane outside for both wear and tear and security reasons.
 
Back
Top