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      Rising Fuel Prices (# 40)

Training Tips
Rising fuel prices: Will you feel it at the avgas pump?
Keeping your avgas costs down

Many variables influence the price of 100 LL, and crude oil plays a role. But when avgas prices increase, you can modify your flying style to operate in a fuel-efficient manner.

Remember to lean the aircraft´s fuel/air mixture when you are taxiing and in cruise flight. This can give you better economy and greater range.

Crude oil prices are rising, and no relief is in sight. That has some AOPA members wondering if their wallets will feel the increase in prices the next time they taxi up to the pumps to refuel their aircraft with 100 LL avgas.

"The most important thing to remember when discussing the price of aviation gasoline is to recognize that it is a specialty fuel, and the production, distribution, and sale of 100 LL avgas is different from automotive gasoline and jet fuel," said Rob Hackman, AOPA manager of regulatory and certification policy. "Many factors — including crude oil prices — affect the price of avgas."

The cost of avgas is less dependent on the price of crude oil than on the production process for the fuel. Avgas is composed of manufactured chemicals like aviation alkylate and toluene, and the production costs associated with these synthetic compounds contribute significantly to the price of the finished product. This makes avgas prices more stable than jet or automotive fuel, which are heavily influenced by the price of oil.

Aviation fuel also has a low production rate. It is divided among nearly a half a dozen petroleum producers who may produce aviation gasoline on a limited basis and then focus on other petroleum products the rest of the time. Avgas often is stored for long periods of time before it is distributed to airports because only small quantities are used as compared to automotive gasoline. Therefore, avgas is not as affected by market fluctuations in oil prices, unlike automotive gasoline and jet fuel, which are consumed almost as quickly as they are produced.

There is also an increased expense involved with shipping small quantities of avgas to numerous sales points in one area. It cannot be mixed with unleaded petroleum products, so it requires its own distribution system.

Most aviation fuel is sold at fixed-base operators (FBOs). And much of an FBO´s revenue may come from fuel sales. In order to generate enough revenue to finance the other services FBOs offer, they must raise the price of avgas.

The price per gallon is marked up again by federal and state fuel taxes. The current federal fuel tax for noncommercial flights, which isn´t scheduled to change until 2007, is 19.4 cents per gallon for avgas, and 21.9 cents per gallon for Jet A. State excise taxes run up to 23 cents per gallon for avgas and 8 cents per gallon for Jet A. State sales taxes for both go up to 7.5 cents per gallon. (Remember that fuel taxes comprise general aviation´s contribution to the federal and state aviation trust funds that pay for much of the airport and airway facilities that general aviation uses. Without that tax, the funds would likely come from passenger facility charges, landing and access fees, or other user fees.

Strict state occupational safety and health regulations regarding the handling of products containing tetra ethyl lead and pressure to remove lead entirely from the environment combine to increase the cost of avgas.


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