Fluctuating fuel prices

[Ivor_Novello]

Ok, I am not expert in world economy and fuel pricing policies, but I seemed to notice the clubs self hire rates have been timely adjusted and increased in recent months with the increasing costs of fuel.

Don't see the same happening now, while we witness a substantial fall of the price of oil.

Are prices adjusted only upwards ? I guess they're gonna go up again at some point, so why not just leave them where they are....


(an argumentative) Ivor

[NorthSouth]

Clubs are dependent on the price decisions of their fuel suppliers, who are in turn dependent on the price decisions of the fuel producers. If I was in a club making decisions about what hire rates to charge at the moment I'd be very wary of cutting prices in response to an apparent down turn in the barrel price. It'll be a self-fulfilling prophecy anyway - if piston engine activity continues to decline, demand for avgas will decline so the unit cost of production will go up.

Then of course there's the effect of the immoral self-serving b***ds who make money out of talking up the price and have recently realised that there's no limit to the profits they can make because the world is so dependent on hydrocarbons.

Still, we don't have to worry about fuel prices at the moment because the weather means there's no flying happening in any case.

NS

[EGBKFLYER]

Speaking for the club I fly with, our owner kept hire prices stable for some 18 months in a rising market before having to 'give in' and raise hire rates.

Given average profit margins in this sector, I think we can hardly accuse schools and clubs of making a killing. Most struggle to keep their heads above water.

Hire rates are also rising in the UK because maintenance costs are rising with the introduction of the new Part M regs - see another thread in this forum...

[Nibbler]

It was the same at most clubs/schools in the South, Compton Abbas, Old Sarum, Goodwood and Bournemouth all kept pricing the same until it was no longer possible to do so. I would expect pricing will stay the same for some time now, until they face the same situation.

Bournemouth has already started changing the petrol fleet to diesel FADEC which is keeping the price down, below petrol hire price increases. In fact they are offering a full 45 hour PPL in a FADEC PA28 with £400 free stuff including headset, exams and ground school for less than £7,000!

I flew a 172 2.0L diesel the other week - 4.5 US GAL perhour at 70% power 110kts IAS. Not bad methinks.

[BackPacker]

Another reason might be that the person who decides on the end user price (ie. the airfield owner) doesn't follow market prices on a day by day basis, but simply takes the price of the last bowser of 100LL he received, divides that by however liters it contained, adds a standard uplift to make a tiny profit, and charges you that price until the next bowser arrives.

So you might still be paying prices that were set two weeks ago, depending on the volume of sales. Obviously when the price is going up steadily, this works out to your advantage. But when the fuel price is going down steadily (like in the last few days) this gives you a disadvantage.

If you want to save some money, best idea is to shop around a bit for the lowest fuel price, and split the difference between that price and your home base between the owner and the pilot.

Or, as others have suggested, convert to mogas or Jet-A.