Why does 100LL cost so much?

Recently, we received a number of emails concerning the cost of 100LL at various locations, as well as the cost of 100LL vs. Jet A. Obviously, there is still a lot of confusion about this, so I thought I would try to shed some light on the issue.

When crude oil arrives at the refinery, it can contain several hundred different hydrocarbon compounds. Each molecule contains carbon and hydrogen atoms in differing configurations.

The first step is to boil the whole thing and pump it into a distillation column. This is a tall column with differing temperature ranges at each height, with the hottest at the bottom and getting cooler as you go up. Off the top, they pull the Liquefied Petroleum (LP) and butane. The next range is the normal range for gasoline and is called straight run. However, the octane is usually too low to be used directly, so this product goes to catalytic reforming, alkylation, or some other further processing.

The next range of products are called middle distillates, which would be the Jet A and diesel products. These can be used directly off the column with no further processing except sulfur removal. The next heavier range is called heavy distillates, and usually goes to catalytic cracking or bunker fuels. What is left at the bottom of the column can be used for asphalt, coke, or can be burned in the refinery.

To make Jet A, all that is needed is to take the stream off the column, lower the sulfur content and ship it out the gate. They do check to ensure that it meets the requirements of ASTM D-1655, but that is a continuous process.

To make 100LL, they take the alkylate, which is an acid treating process, and redistill it so that it will meet the distillation requirements of ASTM D-910. Each refiner values products differently, but because of its high octane, most value the alkylate at a higher value than other streams — plus the extra distillation increases that cost.

The aviation alkylate is then pumped into a separate tank and 2.0 grams per gallon of lead is added. The cost of the lead and the equipment needed for the injection is very costly. One of the problems is that there is only one plant in the world now producing TEL, so there is no price competition. Another is that because of the health hazards associated with pure TEL, it must be handled in a dedicated system.

The 100LL batch is then tested and if the octane does not meet the 100/130 levels, they must add an expensive component called Toluene concentrate to increase the octane to meet the spec.

Once the batch meets all of the requirements of D-910, it is ready to ship. Here is where the cost continues to go up on the 100LL.

Jet A is shipped in large volumes to all parts of the country through pipelines. For example, the airports in Chicago use about 4 million gallons every day, so all of the terminals have a ready supply.

100LL is a specialty product not because of its lower volume, but because it contains lead. No common carrier pipeline in the US will allow 100LL. This means that it must be shipped by rail or truck. By comparison, it would cost only a few cents to ship 8,000 gallons of Jet A 500 miles, but it would cost about $2,000 to ship the same amount of 100LL.

Another difference is that an FBO can shop around for the best price on Jet A, because almost every distribution plant in the country has it. With 100LL, most FBOs cannot take 8,000 gals of 100LL direct from a refinery, so they must buy from a fuel distributor in their area.

Here in the U.S. we have a competitive market system, which uses competitive pressure to keep the cost down. But in 100LL, there really is not a competitive market. First of all, there are less than 10 refineries in the U.S. now producing 100LL.

Add to this that most FBOs, especially outside major markets, have just one, maybe two, sources to buy 100LL, which means they must pay whatever price necessary just to obtain the product.

The FBOs set their prices based on their situations. For example, some FBOs try to cover overhead expenses by fuel sales. Others want to increase the number of $100 hamburger sales, so lower the price on 100LL.

Another problem is that it takes more labor to market 100LL than other products. The FBO should be checking filters, water drains, etc., for their fuel systems every day.

And then we have liability. I know I sound like a broken record, but liability costs are factored into every aviation product on the market today. Every company looks at costs differently. For example, some companies just add the cost of the leading facility, the increased value of the high octane alkylate product, the liability risk factor, and other factors to the overhead cost of the refinery.

About 20 years ago when it was necessary to upgrade our lead injection system, I worked on a study to accurately assess these costs and add it to the cost of 100LL. The result? We stopped producing 100LL.

 

Ben Visser is an aviation fuels and lubricants expert who spent 33 years with Shell Oil. He has been a private pilot since 1985. You can contact him at Visser@GeneralAviationNews.com.

Comments

  1. Mark says

    I’m with Greg on the historical issue of avgas. Seems to have doubled in five years and maybe tripled in about fifteen years. Seems like I was paying around two bucks a gallon in the LA basin fifteen years ago; doens’t make since when avgas has been around maybe about 80 years.

  2. Greg says

    But you didn’t answer the question. The average price of aviation fuel approximately doubled in the last 5 years. Even your own data suggests that the cost to ship the fuel only accounts for $0.25/gallon, and that hasn’t changed much. Why did the price go up so much compared with auto fuel in the past 5 years? I suspect that it is due to regulatory reasons, and therefore may be attributable to the Obama administration or democrat sponsored legislation. After all, Obama proposed a $100 per flight tax on GA, clearly they demonstrating the willingness to damage the GA industry for no particular reason except to punish airplane ownership.

  3. John Jardine says

    Mr. Visser, thanks so much for this information. I think many people gloss over the refinery process and focus on fuel as a natural resource. It is interesting–at least to me–to understand the refinery process from a manufacturing, transportation and marketing standpoint. Thanks for sharing your expertise. I would love to read more. -John

  4. says

    But why does 100LL cost so much? A few years ago it was on par with regular gasoline. I think in 2008 when gasoline was over $4/gallon 100LL was even cheaper.

    • BSAIR says

      Actually in July 2008 100LL AvGas was $5.47 per gallon at our FBO, and over $6.00 in central California.

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