Why does the 100LL price not drop with MOGAS?

Wtf. I pay 7.50 for 100LL :(


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flyingron said:
Getting back on topic. The distribution and sales system for AVGAS is a much slower response to changes in crude pricing than gasoline. Your airport may end up with the same avgas delivery for a month and the suppliers have similar long stocks. Your average gas station response time is days.
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One small adjustment....the price is slow to respond (drop) when prices are falling. When wholesale prices are rising, prices increase in quick response. Justified on the basis that the FBO needs the extra money from current sales to afford the more expensive next load of gas.
 
flyingron said:
They tried converting to metric and it was resoundingly a failure in the US.
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It failed, IIRC, because a "hard conversion" was required. "Soft conversions" we're not allowed. And thus, there would be no reverse compatibility.

Using construction stuff as an example:

A 4x8 foot sheet of plywood couldn't simply become a 122x244 cm sheet of plywood. I would be required to become 125x250 or something else "properly rounded".

Similarly a 2x4 couldn't simply become a 3.8x7.6 cm stick of wood...but rather a 4x8 cm or some other sum such.

That's what I recall being the big push-back but I may be misremembering...it's been 35...40 years ago after all.
 
Detroit brands.

I know that my 72 Chevy was entirely English units. My 2000 Ford was mostly metric, with a few bits still in English units. I'm aware of this because I had to repair them a lot. There must have been a big change in between, but I missed it due to owning imports that didn't need repairs.
 
I figured it was simply ford putting in Mazda motors and similar. Not a planned switch over to metric.
 
As previously stated by someone else, storage capacity relationship to sales volume is very different. I buy a new tanker load of avgas every 3 months or so.

We may adjust prices about once a month based on a 100NM survey to stay near the same price point in relation to our competition.
 
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Anthony said:
Screw the Metric System, and nancy boy games like Soccer. This is AMERICA! :D
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You are missing the important part. It's fun to get on a sport bike and see that the speedo reads to 300.
 
JHW said:
You are missing the important part. It's fun to get on a sport bike and see that the speedo reads to 300.
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Kilometers per hour is for the timid. Plus we have guns! :D
 
coloradobluesky said:
Ah yes. Liberia is on the English system still. Well THAT is certainly comforting. We started converting in the late 70's but for some reason the politicians gave up (its gonna take a government madate to do it, that one is painful I agree).

It is a pain to convert. Hard process, but it CAN be done.

No one wants to do it anymore. That leaves the USA the ONLY ONE (yes England has converted). Is this really inovative?
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Converting is simple, all our packaging is already dual printed, most of what manufacturing we have left is already to metric specification. The only thing difficult about it is the attitude in the US that everyone needs to bow to us.
 
In regards to metric conversion commercial airliners are an international standout. As I said, I don't use metric tools to work on an Airbus and although you can switch the Baro between inHg and kPa there is no way to read Meters on the altimeter.
 
In the cracking process, making diesel fuel is usually cheaper than making gas. Why does it cost more? Now that there is a glut of oil and gas over the globe, why hasn't gas come down more? Say to 1.80-2.00 per gallon? Why are the major suppliers still given big big subsides , courtesy of the taxpayers, when they then turn around and give a retiring CEO a bonus of 0ver 370 million dollars plus absurd perks. ?
 
Jimmy cooper said:
In the cracking process, making diesel fuel is usually cheaper than making gas. Why does it cost more? Now that there is a glut of oil and gas over the globe, why hasn't gas come down more? Say to 1.80-2.00 per gallon? Why are the major suppliers still given big big subsides , courtesy of the taxpayers, when they then turn around and give a retiring CEO a bonus of 0ver 370 million dollars plus absurd perks. ?
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What subsidies are you referring to, exactly? The oil and gas industry doesn't get any subsidies to my knowledge.

And why would giving subsidies to "suppliers" cause costs to remain high? Logically, subsidies should make prices lower - if there were any subsidies.

Diesel used to cost less than gasoline until the 1990s when a bunch of sulfur reduction mandates kicked in and now it costs more than gasoline.
 
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The reason Diesel costs more is supply and demand. When you crack a barrel of oil you get a mix of gas and diesel (and other stuff) that is fixed by the chemical reactions the oil goes through. Different crude is slightly different mix. So you have to have both of them and you have to have a mix in the fleet of users that matches the output. When the fleet to output match gets off, prices can fluctuate quite a bit.
 
timwinters said:
Using construction stuff as an example:

A 4x8 foot sheet of plywood couldn't simply become a 122x244 cm sheet of plywood. I would be required to become 125x250 or something else "properly rounded".

Similarly a 2x4 couldn't simply become a 3.8x7.6 cm stick of wood...but rather a 4x8 cm or some other sum such.
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I don't see why not. An 2x4 is really 1.5 x 3.5 finished. Rounding up or down a couple of millimeters isn't going to be snot in the ocean.

By the way, bought any 3/8" plywood lately? Look on the back. It is actually 11/32". If we can shave a thirty-second off of a sheet of ply, why not just millimeterize it up or down a hair and be done with it.

Jim
 
Anyway.

100LL does follow mogas in a macro sense. But there is vastly more mogas made and sold than 100LL. Mogas is produced by many refiners while 100LL is produced by very few. 100LL is a niche specialty fuel made in batches. It takes a while for high-cost batches to get sold out and replaced with lower-cost batches. So there is a delay. There is a delay with mogas also but it is much shorter and should be expected to "show up" at the airport somewhat quickly IF that airport sells mogas at a brisk pace.

There is much more competition in the retail space with gasoline than 100LL. How many airports have a single FBO? Many if not most? The competition in avgas comes from my ability to land at any airport I choose. So I choose the cheaper ones. But there is not the day-to-day pricing competition that you see with retail mogas.

100LL will come down if crude prices remain low long enough. The lower prices work their way downstream as we use up the high-dollar avgas.
 
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timwinters said:
Similarly a 2x4 couldn't simply become a 3.8x7.6 cm stick of wood...but rather a 4x8 cm or some other sum such.
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2x4's are 2 anythings by 4 anythings. Actually, when you deal with metric dimensions in woodworking you typically also get the actual dimensions (8 mm plywood is actually 8mm thick) as opposed to the colloquial dimensions.
 
petrolero said:
What subsidies are you referring to, exactly? The oil and gas industry doesn't get any subsidies to my knowledge.

And why would giving subsidies to "suppliers" cause costs to remain high? Logically, subsidies should make prices lower - if there were any subsidies.

Diesel used to cost less than gasoline until the 1990s when a bunch of sulfur reduction mandates kicked in and now it costs more than gasoline.
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The oil company's get no subsidies? You can't be serious!
World wide, over a trillion a year. Bring yourself up to date......PLEASE! And.....as usual diesel priceis the governments fault. Get real.
 
Jimmy cooper said:
In the cracking process, making diesel fuel is usually cheaper than making gas. Why does it cost more? Now that there is a glut of oil and gas over the globe, why hasn't gas come down more? Say to 1.80-2.00 per gallon? Why are the major suppliers still given big big subsides , courtesy of the taxpayers, when they then turn around and give a retiring CEO a bonus of 0ver 370 million dollars plus absurd perks. ?
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There is a difference between the cost of the barrel of oil and the finished product. The oil has to be refined to turn into the product that gets sold. Restrictions on building new refineries due to environmental issues has created a major choke point. In addition, local environmental requirements for fuel ingredients means that fuel sold in one market cannot simply be shipped to another market to satisfy any short term shortages. If the price of gasoline spikes in Chicago, they can't just ship more gasoline they intended to sell in Indianapolis to Chicago to help meet demand.
 
Jimmy cooper said:
The oil company's get no subsidies? You can't be serious!
World wide, over a trillion a year. Bring yourself up to date......PLEASE! And.....as usual diesel priceis the governments fault. Get real.
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Name the subsidy in the US, please. I assure you I am real. :rolleyes2:
 
JHW said:
Unleaded is $1.62 per liter here. You guys suck. This thread is cruel and unusual punishment and should be moderated immediately.
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Hey back home in the UK I pay the equivalent of $2.25 a litre for standard unleaded because our government rips us off with high taxes on our fuel. :sad:

I get some strange looks at the pumps when I fill my truck up when I'm here at my Florida home....folk don't understand why I look so happy to be filling up at around $3 a gallon.....:goofy:

Now if I can just get you guys here in the US to go metric my life's work is complete.....;)
 
timwinters said:
Only about $5 billion per year. Easy enough to google. Oil companies have been getting subsidies since the beginning of time.
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So name it if it's so easy.

Also... $5 billion? LMAO. That is a tiny drop in a huge bucket.

I am pretty sure I know what you guys are getting at, but I want you to say it before I bother debunking your myth.
 
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timwinters said:
Only about $5 billion per year. Easy enough to google. Oil companies have been getting subsidies since the beginning of time.
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My understanding is that the "subsidies" the oil companies receive are no different than those available to any other industry. But there are no specific subsidies that we give to just oil companies. It sort of like saying we give subsidies to oil company CEO's because one took a deduction for the mortgage on their primary residence. Sure, it's true that that CEO took the deduction, but it's not true he got the break because he was an oil company CEO.
 
PPC1052 said:
My understanding is that the "subsidies" the oil companies receive are no different than those available to any other industry. But there are no specific subsidies that we give to just oil companies. It sort of like saying we give subsidies to oil company CEO's because one took a deduction for the mortgage on their primary residence. Sure, it's true that that CEO took the deduction, but it's not true he got the break because he was an oil company CEO.
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Well some people have bought into the Democrat/Government/Media view that oil companies are "evil". :rolleyes:
 
Anthony said:
Well some people have bought into the Democrat/Government/Media view that oil companies are "evil". :rolleyes:
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Some people have also bought into the "corporations are evil" and "profits are evil" memes as well.
 
petrolero said:
So name it if it's so easy.

Also... $5 billion? LMAO. That is a tiny drop in a huge bucket.

I am pretty sure I know what you guys are getting at, but I want you to say it before I bother debunking your myth.
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A few:

Enhansed Oil Recovery Credit
Credit for Oil & Gas from marginal wells
Expensing of intangable drilling costs
Deduction for tertiary injectants
Passive loss exception for working interests in oil & gas wells
Domestic Manufacturing deduction for oil & gas companies
Geophysical & Geological amortization periods

Granted, these are are all perfectly legal and the expensing of intangable drilling costs is a more wide ranging deduction across all manufacturing.

Probably all added up, it might be a $5 billion a year increase in Federal revenue. Alternative energy also has it's share of "subsidies". Will eliminating these fill a huge hole in the revenue stream - no- but there is merit to changing some of them.

More information is here:

http://budget.house.gov/uploadedfiles/crsr42374.pdf

And, from that noted left-wing, liberal organization, another opinion:

http://www.heritage.org/research/reports/2011/05/whats-an-oil-subsidy

Of course this is only US law. Since a pretty good portion of crude production is overseas (and generally nationalized), the "subsidies" are quite different.

Gary
 
Anthony said:
Well some people have bought into the Democrat/Government/Media view that oil companies are "evil". :rolleyes:
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:D Perhaps SOME, but certainly not all. Oil companies are generally no more "evil" than say.... ENRON. :D

Gary
 
Gary said:
A few:

Enhansed Oil Recovery Credit
Credit for Oil & Gas from marginal wells
Expensing of intangable drilling costs
Deduction for tertiary injectants
Passive loss exception for working interests in oil & gas wells
Domestic Manufacturing deduction for oil & gas companies
Geophysical & Geological amortization periods
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PPC1052 said:
My understanding is that the "subsidies" the oil companies receive are no different than those available to any other industry. But there are no specific subsidies that we give to just oil companies.
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:dunno:

:rofl:
 
Jimmy cooper said:
Now that there is a glut of oil and gas over the globe, why hasn't gas come down more? Say to 1.80-2.00 per gallon?
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Because crude is presently trading at about 82.00/barrel or $1.95 per gallon. And then there's the cost of extracting, shipping to the refinery, refining, and then redistributing again (and probably some other stuff I don't know about since I'm not in the industry). Actually, I'm amazed that it can be bought for as low as $2.55 around here right now...that whopping 60 cents ain't much to do all the drilling, transporting, processing and still get some OH&P out of it.
 
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timwinters said:
Because crude is presently trading at about 82.00/barrel or $1.95 per gallon. And then there's the cost of extracting, shipping to the refinery, refining, and then redistributing again (and probably some other stuff I don't know about since I'm not in the industry). Actually, I'm amazed that it can be bought for as low as $2.55 around here right now...that whopping 60 cents ain't much to do all the drilling, transporting, processing and still get some OH&P out of it.
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That price ($82.00/bbl) is for either West Texas Intermediate (WTI) or Brent crude - I'm too lazy to look it up. They are the "premium" crudes. Others, such as Venezualen or Canandian oil sands crude sell at a discount of that due to the fact they are harder to transport, refine or high sulfur. Don't worry though, there is still plenty of gross profit at the volumes processed.

Gary
 
Gasoline is priced off Brent, not WTI. The $82 oil won't have an impact on gas price. Brent has dropped significantly as well so it makes sense gasoline has come down in price.

I think the price of 100ll has a lot to do with how the refineries are set up. To make different products they have to change the operations in the plant. Next batch of 100ll may be produced at a lower price so we may see some price improvements.
 
Gary said:
:D Perhaps SOME, but certainly not all. Oil companies are generally no more "evil" than say.... ENRON. :D

Gary
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I used to deal with Enron in their hayday. :rolleyes:

The Exxon/Mobils, Shells, BP's etc of the world supply what the entire planet runs on, and at a relatively low profit margin (gross margin). With the supplies of domestic, U.S. natural gas on the rise, I am wondering if this is part of the reason we are seeing crude prices decline. I know due to the poor economy, demand worldwide is down also.
 
I think the boom in production in the US and Canada is helping, imagine if Obama allowed the federal areas he shut down in his first year to be reopened, energy would be cheaper and our economy would benefit.......

The energy platform of democrats is destructive to our economy and our country, period. There outright declarations that energy needs to be expensive is like a direct attack on the elderly and poor in this country who are on fixed incomes and devastated by the democrat/environmentalist agenda and its implementation.
 
Hey, Paul, see my signature tag line below.

BTW...I'm sure Clark knows the exact number...fracking isn't viable below something like $75 or $80 / barrel. So, if oil drops below that point, our boom areas bust. I doubt we'll ever see oil below $80/barrel again without another economic crisis driving it.
 
timwinters said:
Hey, Paul, see my signature tag line below.

BTW...I'm sure Clark knows the exact number...fracking isn't viable below something like $75 or $80 / barrel. So, if oil drops below that point, our boom areas bust. I doubt we'll ever see oil below $80/barrel again without another economic crisis driving it.
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Hey Tim, coming from you it must be true, takes one to know one. :D

We have a president who has publicly said that energy needs to be much more expensive for alternative energies to be viable. I live in a state where the sitting governor has declared war on coal plants closing them down before more gas plants can be built and more importantly before an adequate gas supply pipeline is in place. The result? A winter rate of 24.24 cents per kwh for national grid customers. Up from about 16 cents per kwh from last year.

So much for politicians and political parties not influencing energy prices.

I think as we get more experienced at fracking the costs will come down, I also think other areas of the world would love to drive the fracking fields out of business but I doubt that will ever happen.
 
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