Aviation Petrol Markets Showing Solid Growth Trends into 2020 – What It Means To Meiya
Written by: Roland Pinto Nissim, Chairman and CEO, Meiya Group Global
April 6, 2016
World leading petrol companies providing fuel to feed aircraft are reporting a steady increase in kerosene consumption over the past twelve months. The world’s leading fuel providers are positioning assets and capability to continue to provide inventory to supply the continuing demand increase expected well into the next decade.
According to a new research published earlier this year, “The Global Aviation Fuel Market 2016 – 2020” research report states that the main impact on fuel prices is being caused by a continuing falling crude oil price on kerosene which is leading to continued growth in the aviation sector. This growth is being led by the commercial 121 operators consuming the majority of produced jet fuel available in the market. Growth in the commercial sector is exploding. Airlines are taking advantage of historically low fuel prices and purchasing new fleets of highly fuel efficient aircraft to drive earnings up and increase capacity at an alarming rate.
This has expectedly caused a ruffle in the oil and gas company’s strategies. These production firms are having to close oil rigs and stop harvesting from wells. Due to lowered public cost, revenues are just not there for these companies and in many cases, the cost to operate these facilities is higher than the revenue earned from selling the crude.
A recent announcement by OPEC to slow down collection of crude has in fact done something positive to the price of oil. A reduction in the amount of available barrels of oil in the market will surely have a positive effect on the price. Expectations of surging prices are driving short term per barrel costs up at present.
Additionally, the growing development and use of new biofuels across the world is another key factor to a lowering of the pure oil fuel prices. Many nations are introducing mandates and policy changes to promote the use of biofuels and cleaner fuel supplies which is stressing out the pure oil fuel industry. New competition from biofuel providers will add to an already growing competitive oil marketplace. In a nutshell, the world is just harvesting and refining way too much oil. Biofuels are being blended with pure oil fuels to create a new form of cleaner burning petrol. Led by many nations in Europe and the United States, demand for this new blend will continue to increase well into the future, causing the need for pure oil fuel to go down. This will in turn keep the price of crude and its refined by-products down as expected well into 2020.
The industry expects a growth of over 3.1% aggregate growth rate during the next five year period. The above-mentioned report also states that an increase in the number of aircraft being produced and flown a critical driver to aid the growth of the industry. Boeing expects demand for new aircraft to be over 32,000 needed airframes between 2015 and 2034. This was published in a recent Boeing industry survey of needed pilots, mechanics and aircraft for the next twenty years. This is a favorable prediction and has the world’s airlines scurrying to find pilots to fill the front seats of these machines.
Leading companies providing aviation fuels are Shell Aviation, Exxon Mobil, Chevron, Air BP, and AltAir Fuels.
Meiya operates fuel dispensing pumps at airports in the western region of the United States of America. Currently, prices for AvGas and Jet A fuel are at a low with an expected short term increase in the price of crude driving the price paid at the pump of many operators, the group’s petrol dispensing company should continue to enjoy volume based success in this sector. Standard in the industry, profits increase in parallel to the price of fuel, the expected short and mid-term increase in oil prices is allowing Meiya to continue investment into regional dispensing locations as the company grows its fuel delivery network.