I work at an FBO in the midwest. Our supplier normally changes prices weekly and since the first of the year it seems our cost and prices have been steadily climbing. Then a couple weeks ago things seems to have peeked and leveled off. Jet Prices have stayed nearly the same for several weeks and Avgas had gone down, not much but some.
Then there was this week. An order of fuel we had ordered for a monday delivery had to be trucked in from over 550 miles away. I knew the freight would be higher but was shocked to find out it was MUCH more than just additional freight. I called my fuel rep and found that the AvGas market is in a real mess. There is not enough avgas refined to cover the demand PLUS there are distribution problems due to the drought. Barges are not making it through a lot of their normal routes with full loads of fuel. Some have even had to back track to off load fuel.
This has caused a ripple effect. Normally oil companies exchange fuel at the terminals. Phillips will trade with AirBP in one location for fuel in another, or Chevron will trade with Exxon. This is apparently a “loose” agreement. Now because of the shortage everyone has stopped trading with each other. Everyone is hording fuel, which is why our fuel was trucked 550+ miles. The jump we experienced was not only because of the additional freight but because the terminal knew they could get by with it. We were lucky to get fuel. There are apparently numerous terminals running out of product. A nearby business that buys their own bulk fuel went to order it today and found they could not even get any. If they do not they will have to shut down.
As the retailer we are the bad guys in the customers eyes. We are not making a penny more per gallon but have the unenviable task of telling customers about the jump. I have to call and warn all of our business customers so they can adjust their prices accordingly.
The big winner in this seems like the state governments. Most state sales taxes on fuel are a percentage. A 75 cent jump in our prices nets the State an extra 6 cents per gallon. With the rising cost of Auto and aviation fuel over the last year, the states coffers should be overflowing.
You have been warned!
PS: Don’t blame the FBO’s its not anything we can control