Avgas prices

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dave_091
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Avgas prices

Post by dave_091 »

Since we will be experiencing a period of much lower oil prices when will we see a significant drop in Avgas prices, if any?

I'd like to hear what people speculate about this topic.
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photofly
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Re: Avgas prices

Post by photofly »

Avgas prices (around here at least) vary quite slowly, and I haven't noticed them tracking the price of crude either - up or down - very much at all in the last couple of years. And the cost of the raw crude is only a part of the costs - refining and transport haven't got any cheaper. So I'd not expect any significant change, and none at all any unless crude stays low for a significant length of time.
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iflyforpie
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Re: Avgas prices

Post by iflyforpie »

Avgas prices track crude prices... but only in the upward direction. Happened in the early 2000s, happened in '08, probably happened before and I'm sure it will happen again.

Just like automotive fuels though... it is very reluctant to drop down. There is little incentive for it to do so since the market has shown it will bear higher prices.
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photofly
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Re: Avgas prices

Post by photofly »

Just like automotive fuels though... it is very reluctant to drop down.
Mogas prices are way low at the moment, they've been falling since the summer, enthusiastically, to their lowest levels in three or four years.
There is little incentive for it to do so since the market has shown it will bear higher prices.
The incentive is competition: if you can lower your prices you take the business of price-sensitive consumers from your competitors who don't. If Avgas prices don't fall it's because it's not a competitive market (for which read, pilots don't give a damn what they pay). Mogas is a very competitive market - check the queues for cheap gas at Costco for proof - which is why prices come down smartly.

Let me write it another way: for every gas retailer who thinks to himself that "the market can bear a higher price so I'm going to increase my margin as my supply side cost falls instead of lowering my sale price" - there's a smarter more profitable retailer living in a bigger house with a bigger pool who's lowering his prices asap.

Do you see anyone still charging $1.39/litre like they were here in August because "the market can bear that high a price" ? No? I didn't think so.
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Last edited by photofly on Wed Dec 10, 2014 12:32 pm, edited 1 time in total.
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linecrew
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Re: Avgas prices

Post by linecrew »

Is there a good app like 'Gasbuddy' for aviation fuel prices?
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MrWings
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Re: Avgas prices

Post by MrWings »

Foreflight
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iflyforpie
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Re: Avgas prices

Post by iflyforpie »

I didn't say they wouldn't go down... I said they are reluctant to go down. Part of it has to do with the high priced bulk fuel they have to sit on until it gets used up. If crude were $20/bbl tomorrow.. you think we'd see gas at $0.40 like it was in the 90s?

Prices are $1.20 here... which isn't what I'd call cheap... and is what a few years ago most of us would have called way too expensive. People thought the world was going to end with $0.70 fuel... and here we are celebrating about fuel hovering at a buck... because the market can bear it.

The nearest Costco is three hours away from me. Plus, Costco isn't very convenient for getting fuel and it comes with the hidden cost of a membership.... ....not really a direct comparison to the corner gas station.
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photofly
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Re: Avgas prices

Post by photofly »

The point with Costco is that people are prepared to queue for the cheaper fuel. Whether you want to pay the membership or not, it's clear evidence that people are price sensitive in their choice of where to buy the stuff.

Where competition is less intense - due to remoteness, for example, then I'd expect margins to be higher. But here in Toronto they track the price of crude up and down quite well.
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dave_091
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Re: Avgas prices

Post by dave_091 »

Photo fly: I heard (hearsay, not backed up by fact) that avgas comes from only one company in Canada. If it does only come from one company that could explain why avgas prices could remain higher, due to lack of competition. If there is no one else that will undercut the suppliers price then why would they bring down their price? However, if the price (of the supplier) does come down and a airport still charges exorbitant amounts for avgas while another airport 30 minutes away is selling for 10 cents cheaper per litre I will go to the cheaper place even if it's not my home airport.
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Re: Avgas prices

Post by AirFrame »

linecrew wrote:Is there a good app like 'Gasbuddy' for aviation fuel prices?
App, not yet. But I run a website that tracks fuel prices based on field reports: 100LL.ca.
There is a comparable site in the US that tracks US fuel prices: 100LL.com. I'm not affiliated with them.

It also has a couple of handy utilities on it... Most of the CFS data for Canada, and METAR/TAF info for North American airports. I've tried to keep it usable from a mobile device, I figured since you need to be online to get current data anyway that having a dedicated app may not be beneficial over what you can do with a website.
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photofly
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Re: Avgas prices

Post by photofly »

Agreed, if there's only one supplier, then by definition they have a monopoly and there's no competition, so the mechanism to establish the "market" price doesn't exist.
What should is that if the monopoly's profit margin is sufficiently large, someone else will see the opportunity and enter the market themselves at a lower price, and competition in the market is re-established.
If there is no one else that will undercut the suppliers price then why would they bring down their price?
To prevent a rival from entering that market which is ripe with fat profit margins. It's sort of Economics 101 - the best way to get prices to fall is to reduce barriers to entry in any market which makes competition easier. I don't know what the burdens to become an AvGas supplier in Canada are, but they can't be that high, can they?
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AirFrame
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Re: Avgas prices

Post by AirFrame »

dave_091 wrote:Photo fly: I heard (hearsay, not backed up by fact) that avgas comes from only one company in Canada.
I don't know if that is true elsewhere in Canada, but in the BC lower mainland all fuel comes from one plant just south of the border in Washington.

The only exception to that (that i'm aware of) is the Nanaimo Flying Club, who were apparently (warning, hearsay to follow) buying fuel out of the central US by the rail car tanker load, and having it delivered (by rail) to Nanaimo. Apparently despite the cost of doing that, it's still cheaper than buying it locally.
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cgzro
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Re: Avgas prices

Post by cgzro »

If I remember correctly there is only one mfgr in the world of the Lead additive. The refinery has to make 100ll, then has to clean the entire system prior to making non leaded fuels. So I imagine they make a big batch, then go back to non leaded. I also heard there was only one refiner in Canada that does 100ll.

Anyway the crude dropping will lower the price but the monopoly on the lead additive and the costs of cleaning etc. between runs likely does not help.

For me howerver fuel is only a small part of my operating costs. Wear and tear is outrageous in my case... Two overhauls and a prop in 800 hrs :(
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I_Drive_Planes
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Re: Avgas prices

Post by I_Drive_Planes »

linecrew wrote:Is there a good app like 'Gasbuddy' for aviation fuel prices?
Not an app per se, but http://www.100ll.ca is great and gets better with every person who helps keep it updated.
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photofly
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Re: Avgas prices

Post by photofly »

cgzro wrote:If I remember correctly there is only one mfgr in the world of the Lead additive.
Look up the story of Thomas Midgley - who as the inventor of tetra-ethyl lead and also cholorofluorocarbons contributed more damage to the environment than any other single person in history - and the Ethyl Corporation. Midgley is dead by the Ethyl Corp is still going: http://www.ethyl.com/
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davecessna
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Re: Avgas prices

Post by davecessna »

On a slightly related note, I wonder if/when Cessna will push ahead with that electric 172.
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photofly
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Re: Avgas prices

Post by photofly »

As soon as someone invents batteries that have a sensible stored power / weight ratio!
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cgzro
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Re: Avgas prices

Post by cgzro »

Thomas Midgley
Since humans and overpopulation is generally believed to be the biggest source of environmental damage then Alexandar Flemming should surely be at the top of your little list.
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dave_091
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Re: Avgas prices

Post by dave_091 »

Well, avgas prices are slowly on the decline :)
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BibleMonkey
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Re: Avgas prices

Post by BibleMonkey »

linecrew wrote:Is there a good app like 'Gasbuddy' for aviation fuel prices?
Just grit your teeth and burn the top of your hand with a cigarette before you go in to pay for the fuel, a few cents a liter here or there don't seem to matter so much then. This a a good money saving technique ; When your hand gets too many burns on it-stop flying for a while . Bank account goes up again.

Also, if you get addicted to the cigarettes, you won't live as long, = less bills to pay. Win win.

I used this a bit for informal vfr flight route ('world vfr' button on the upper right ) look aheads:

http://skyvector.com/


Didn't really pay that much attention to their fuel prices on the charts, but it seems they used to have more of them-the little often cheaper airports with fuel. Fewer prices on their now, I think. Not sure how they update fuel prices.
They have some kind of app if you google skyvector apps, but I wasn't interested in it.
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cgzro
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Re: Avgas prices

Post by cgzro »

I used to worry about fuel prices until I overhauled my engine twice and my prop twice and my fanbric once. Now I know its a pretty small proportion of my costs and so I leave my credit card on file with the gas guys and never look at the bills.. much happier that way.
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Big Pistons Forever
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Re: Avgas prices

Post by Big Pistons Forever »

Down nearly 50 cents a litre at most West Coast airports. :D
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cgzro
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Re: Avgas prices

Post by cgzro »

Nothing to sneeze at but at well over $350hr to operate thats less than a 10% reduction in costs in my case. Probably similar to most private operators that dont fly a ton of hours per year. Bloody fixed costs swamp everything else. Gotta fly way more:)
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Big Pistons Forever
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Re: Avgas prices

Post by Big Pistons Forever »

cgzro wrote: Gotta fly way more:)
Yup and cheaper fuel provides a great rationalization to fly more. I put 40 bucks less gas in my Nanchang when I flew last week as compared to 2 Months ago. A great formation flight and 2 extra sawbucks in my pocket......life is good !
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Rookie50
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Re: Avgas prices

Post by Rookie50 »

$4.50! Per GALLON in south Florida. (small airport.). Going lower I suspect. Feel for my Alberta friends though. 2015 will be a rough year.
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