Warren County Memorial Airport is still competing with Smithville when it comes to fuel prices.
At the county Economic and Agricultural Development Committee meeting last week, Commissioner Carl D. Bouldin asked airport director Jim Dyer why the airport’s fuel prices are some of the highest in the area. Dyer explained they use a certain formula where they base the price on what the replacement cost of fuel is, not what they pay for it.
“I was studying and asking to try and figure out what other airports are doing. Some airports will base it on what they paid and they will not change the price until they get another load. That is a reasonable thing to do, I guess, except when they get the other load it is going to go way up. It is like a gas station, you really need to sell it at a replacement price. For instance, you wouldn’t buy your house, live in it 20 years, and sell it based on a price that I paid for it. No, you have to move into another house so you have to think the replacement cost,” said Dyer.
Fuel can only sit unused for six months before it goes bad. The airport was nearly stuck with jet fuel and had to ask people to come buy it so it was not wasted. Now they buy half a load each time to avoid getting stuck.
“In this rising price environment, and the fact that we are basing on acquisition cost as it changes every week, we are going to be higher,” said Dyer. “In a falling price environment what is going to happen is because we buy small amounts more often, our average is not going to, I hope, get us caught. Unless the bottom drops out of it, we are not going to get caught with fuel we can’t sell.”
The committee asked where most pilots go get fuel and Pat Basham was in attendance and answered.
“Smithville is just running cheaper than us even after they got a new load. For a little while we were closer and now they are back cheaper again,” said Basham.
“Right, because we pricing it on the replacement cost not what we paid for. So Smithville’s price is going to stay the same until they need another load. That is just a different way of doing it,” said Dyer.
