The continuing cyberattack on the Colonial Fuel Pipeline, which runs from Texas up the East Coast and supplies nearly half of the region’s petroleum fuels, including jet-A, is raising some concerns among the business aviation industry. Pilots are reporting that they are now being advised by their home-base FBOs to top off aircraft in the face of possible shortages if the situation extends longer.
According to Denton Cinquegrana, chief oil analyst with the Oil Price Information Service (OPIS) by IHS Markit, "Jet fuel spot markets have not necessarily seen prices spike in the Gulf Coast or New York Harbor, however, visibility into the downstream terminals is more limited and from what we can see, prices are significantly higher than spot due to no resupply arriving with the Colonial Pipeline being down."
Cinquegrana told AIN that the Plantation Pipeline, which serves similar regions as the Colonial, albeit at a much smaller capacity, is still currently operational and can provide some measure of relief, but distributors who are required to use alternate, less geographically optimal fuel terminals will experience higher costs due to longer road transport distances. He noted that with the reduction in pipeline volume to transport the fuel from the refineries even temporarily, the Gulf Coast region could experience a glut of fuel.
Titan Fuels issued an alert to its network customers on Monday regarding the disruption, noting that while it has not yet experienced any supply outages, the jet fuel terminals that could be likely affected would be in Alabama, Georgia, Tennessee, the Carolinas, and Virginia. The distributor said that while it will use all available resources at its disposal to supply its customers, it would be passing along all associated freight and product cost increases to them, no doubt putting pressure on prices at the pump. It also urged its clients not to stockpile fuel, stating it would exacerbate supply issues and overwhelm the already taxed fuel transport companies.
Avfuel, which has more than 600 locations in its U.S. branded dealer network stated that "while Colonial is expecting to have the majority of the pipeline operational by the end of the week, we expect pipeline shipment delays to linger on for several weeks." The Michigan-based fuel provider said that despite the potential for short-term outages, its FBO network can expect continued supply of fuel as Avfuel’s supply and logistics team is able to capitalize on redundant supply relationships to deliver fuel from backup terminals when necessary. "However, backup terminals often mean longer hauling distances, so we’re advising customers to order their fuel as far in advance as feasible," it said.
Unsurprisingly, FBOs that AIN spoke with said they are monitoring the situation very closely and making contingency plans. Sheltair, which operates FBOs throughout the affected region, said it expects minor delays in supply at some locations as it switches to other unaffected terminals and will rely more on marine transport for its New York facilities.