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Old June 6th 07, 05:34 AM posted to rec.aviation.piloting
M[_1_]
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Posts: 207
Default Argument against high gas prices

On Jun 5, 2:31 pm, wrote:

I think the truth is that the gasoline futures market is being
manipulated to maximize profits. Why else would the prices of av-gas
rise so much when demand has dropped by nearly 50% since 2000? Why
would auto-gas prices rise rapidly, when demand is flat?


I agree with you that high gasoline price maximizes oil company
profit. However as a pilot you can easily hedge on that by buying oil
company stock, or invest in mutual funds that're specialized in the
oil sector. All major oil companies are public companies. I'm quite
certain that I made far more from the oil companies than what I paid
extra for the fuel, and I only have a small part of my 401k in the
energy sector.

In terms of 100LL avgas, there's something else in play here. Due to
the lead content requiring a separate infrastructure to transport and
distribute the fuel, a reduction of 100LL consumption will result in a
bigger price gap between 100LL and autogas, due to the largely fixed
cost of 100LL infrastructure needing to be spread among a smaller
overall sales. If the 100LL consumption dropped to 50% of today's
level (it probably won't be many years away), don't be surprised that
100LL costs more than $2/gallon over the autogas price.