Why are avgas prices still holding near their all-time highs, while automobile gasoline prices continue to free-fall to near last year’s prices?
Are we being gouged by avgas?
Just updated my fuel price service, 100LL.com, part of my Control Vision Anywhere Map subscription. At my home field, the price of self-serve avgas is $5.28 per gallon. According to the fuel pricing service, the national average is $5.08 (updated as of 10/23/2008. Meanwhile, local low grade auto gasoline, mogas, is running about $3.15 a gallon, and some of the cheapest outlets are slipping below the $3 level. That a 60% difference in price between avgas and mogas.
Ok, I understand all about avgas being a niche product produced in small quantities, needing special handling and shipping because of the lead content, and the price change lag (both up and down) because of fewer flight hours requiring longer to consume supplies bought at higher prices.
Avweb has an editorial about this, but basically says the FBO business is difficult, so grin and pay the prices. Nope. AOPA needs to get involved in this.
In the meantime, I’ll continue to use 100LL.com to avoid the FBOs who insist on holding the higher prices.
November 3, 2008 at 8:51 pm
Are we being gouged by avgas?
The short answer to your question is “Yes, absolutely.”
The long answer is best provided by the manager, John Brattain, of the Charlotte-Monroe Executive Airport (EQY). He knows better than anybody why avgas was fast to go up in price, and very slow to come down. For the record, avgas peaked at EQY on July 11, 2008 at $5.47 a gallon, the same day crude oil peaked at $147 a barrel, and the national average of auto gas peaked at $4.19 a gallon.
As of this date, November 3rd, 2008 - crude oil is at $63.30 a barrel - a 57% drop, and has been at or near this level for several weeks. However, at EQY which prices avgas very fairly compared to most airports - the avgas price was JUST lowered to $4.39 a gallon - a mere 20% decrease. As most pilots know, this story repeats itself with avgas at airports around the country.
Furthermore, avgas is made about three times a year, according to Mr. Brattain, and is brought in on rail or barge, unlike auto fuel which is made constantly throughout the year and is transported by pipeline and truck.
I will quote his email below. Mr. Brattain himself can not understand why avgas is such a ripoff:
“The avgas price is set weekly. It is based on the last week’s average daily rack rate for premium auto gas plus $0.55. The price goes up and down with auto gas, but with a week’s delay. I buy as much avgas as possible when the price is low and keep the same price several weeks until I buy fuel again. Then I do a weighted average fuel cost of the new fuel received and the remaining stock and adjust the price accordingly. Or, I pump the old stock at the same price until it is used up and change the price based on the new fuel wholesale price. We add $0.95 per gallon plus tax to the wholesale price for full-service and $0.50 per gallon plus tax for self-service. Sometimes the price goes up and sometimes the price goes down. If the weighted average goes down, I reduce the price immediately. If the weighted average goes up, I usually wait until I have used up the lower price before I raise the price….I agree that, based on crude oil prices, auto gas (therefore avgas) should be lower than it is today. Also, it doesn’t make sense that avgas prices are linked to auto gas prices. Avgas is produced in batches only a few times per year and transported by ship, barge, and rail. So the avgas on the market today has very little direct relation to the auto gas at the pump. It’s frustrating….”
- John Brattain, Manager, Charlotte-Monroe Executive Airport (EQY)
posted by Todd Fuller
Charlotte-Douglas International Airport Advisory Committee Nominee
November 28, 2008 at 8:54 am
[...] a reply post to a pilot’s blog (Brianflys), Todd Fuller included an interesting letter from John Brattain, manager of [...]
November 28, 2008 at 9:22 pm
[...] Price Gouging? Yes! Ok, I am convinced that someone is feasting on bloated avgas prices. In a prior post, I noted the difference between the falling automobile/mogas prices compared to avgas prices that [...]