Why are aviation fuel prices still high?
There are a variety of aviation fuels, from the high-octane avgas used by small piston-engine aircraft, to the kerosene derived Jet-A used by commercial airliners. There are many factors that influence the price of aviation fuel, from the always-volatile supply-and-demand situation in oil, to geopolitical risks and fluctuating monetary policy.OilAll aviation fuel is derived from oil. It follows that if the price of a barrel of oil is high, aviation fuel will also be expensive. The circumstances surrounding elevated oil prices include political uncertainty in oil-rich territories, supply disruptions caused by pipeline malfunctions, terrorist attacks and oil rig explosions, and a prolonged period of low interest rates, which have lowered the value of several currencies, including the U.S. dollar, reducing their purchasing power and making commodities like oil more expensive.Monetary PolicyMonetary policy has an impact on economic performance, short- and long-term interest rates, currency
