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Author Topic: How High Can Fuel Prices Go?  (Read 1793 times)

Capn Crunch

  • Former member
How High Can Fuel Prices Go?
« on: January 28, 2011, 05:43:35 PM »
As fuel pricing is custom, how has it been playing out in past games...

Just wondering what the potential top range would be on fuel prices for planning purposes.  Looking for likely range in this game, not theoretical range.

Related...once prices peak, how long do they stay in that range (e.g. months, or weeks within a $25-50 band from peak)?

Offline Sigma

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Re: How High Can Fuel Prices Go?
« Reply #1 on: January 29, 2011, 01:14:24 AM »
There is no "likely" guess.  You either know (sami) or you haven't the absolute foggiest clue at all.

Sometimes they stay really low.  Sometimes they go way, way north of $1000.  Sometimes they barely break $1000.
Sometimes they spike for a few weeks, sometimes they spike for a few years.
Sometimes they yo-yo up and down, sometimes there's a single spike in a game and that's it.

There's absolutely no predicting it.

Offline schro

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Re: How High Can Fuel Prices Go?
« Reply #2 on: January 29, 2011, 02:48:39 AM »
I can't wait for them to go up a bit so it'll clear out some of the other USA based airports so I can open more bases with my parked planes....  ;D ;D

Capn Crunch

  • Former member
Re: How High Can Fuel Prices Go?
« Reply #3 on: January 29, 2011, 03:04:42 AM »
Thanks for your reply, Sigma.

I generically agree with your point, but I think there is room to put a reasonable range on this, particularly for the folks who have played this game for much longer than the many of us noobs.

I would surmise from your statement that we can reasonably expect a top end around $1200-1300 (i.e. way way north of $1000).  While it could come to that, I think it would have devastating economic effect, such that only the long established players with stacks of cash could ride it out.  This result would make for a not so fun game for several players (unless, of course, the Pax demand model would allow the rest of us to jack up the price by about 3x, and the level of demand would remain - that is, it recognizes and adjusts for that level of inflation, and therefore is price insensitive).  I've not played enough games to understand how that model behaves.

The pattern in DOM for the past two game years suggests that spikes are unlikely, though no telling if there would be an OPEC 1973 like event programmed.  There seems to be a more gradual ebb and flow, possibly around some moving equilibrium point that itself resets at some interval, perhaps quarterly.  Volatility around the equilibrium seems consistent, percentage wise.  So, I am guessing that a peak could last +/- for a six month period (perhaps only to recede for a quarter to head back up for another six months).  Again, this is an observation of part of the DOM game, and part of the Beginners World.

So, I agree it is not specifically knowable, but I think those with experience across multiple games have gained some knowledge about the general behavior of fuel prices and what is a reasonable top end.  Perhaps I've guessed it here.






Offline Sigma

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Re: How High Can Fuel Prices Go?
« Reply #4 on: January 29, 2011, 04:02:55 AM »
Capn, in the Features forum sami has, in the past couple days, stated that he intends to put Fuel Hedging into the game; likely even into 1.3.  It would practically be a requisite that there be some sort of indicator of future fuel prices if that is the case.  He's discussed an 'advisor' feature in the past, it falls to reason that these could be tied together.  While I personally feel the feature is unnecessary at this point in time, I do think it, or at least the secondary feature of some sort of indicator, should take care of your overall larger point, I believe.

Quote
(unless, of course, the Pax demand model would allow the rest of us to jack up the price by about 3x, and the level of demand would remain - that is, it recognizes and adjusts for that level of inflation, and therefore is price insensitive).  I've not played enough games to understand how that model behaves.

The pricing model does take this into account.  This is why experienced players will tell you to constantly reset your pricing.  Back when we had truly hard games (haven't had one in well over a year in my opinion) ticket pricing could change by a few percent a game-month.  That's huge to your margins.  It's not 1:1 of course, that'd be too easy.  But the inflation model does include fuel as a component.

Quote
The pattern in DOM for the past two game years suggests that spikes are unlikely, though no telling if there would be an OPEC 1973 like event programmed.  There seems to be a more gradual ebb and flow, possibly around some moving equilibrium point that itself resets at some interval, perhaps quarterly.  Volatility around the equilibrium seems consistent, percentage wise.  So, I am guessing that a peak could last +/- for a six month period (perhaps only to recede for a quarter to head back up for another six months).  Again, this is an observation of part of the DOM game, and part of the Beginners World.

I would say that analysis, in terms of general market behavior not necessarily specific figures, would fit for most of the custom worlds we've seen for the past 12-18 months, yes.  I think sami took a lesson from the original North American Challenge game that was vacated in a hurry when an early huge spike killed a substantial portion of the game, from which it never recovered player-count-wise.  The spikes are seemingly less severe, overall less volatility, but I wouldn't go so far as to say I would expect it to continue that way or that I would find it "likely" to occur that way in every game.

Capn Crunch

  • Former member
Re: How High Can Fuel Prices Go?
« Reply #5 on: January 29, 2011, 04:54:19 AM »
Sigma, thanks for your reply, very helpful.

Saw your reference to Fuel Hedging and add my suggestions there.

Offline type45

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Re: How High Can Fuel Prices Go?
« Reply #6 on: January 29, 2011, 03:42:08 PM »
remember constantly reset your pricing, at lease once a game year......I almost get kill by this in my very first world. I start at 1974 and I forget to reset this. I keep losing money when fuel price go up at 1978, until somebody remind me. I burned a few billions (thanks god I save up such huge amount of cash for my move from HND to NRT). When I reset it and regain profit, there were only 5 weeks left before running out of cash :'(

Men

  • Former member
Re: How High Can Fuel Prices Go?
« Reply #7 on: February 08, 2011, 10:03:03 AM »
They start to rise again !!! 271 USD now

Offline ACDennison

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Re: How High Can Fuel Prices Go?
« Reply #8 on: February 08, 2011, 05:09:43 PM »
It's going to get painful - historiclly the next 6 months or so are DESERT SHIELD/DESERT STRIKE and OP GRANBY in Iraq, buringing oil wells and horrible price spikes.  And just to add insult to injury, my routes to ORBI have died back to almost nothing as a result... it seems my pilots and pax have no desire to fly through barrages of AAA and Paveways.

On the plus side, my fuel-sipping ATP's are very nice, and the expensive engine option on my EMB120's now looks tasty too.  Even my assorted 1-11s are fairly conservative.

 

flightsimer

  • Former member
Re: How High Can Fuel Prices Go?
« Reply #9 on: February 09, 2011, 03:33:31 AM »
302 now :( man i remember the days when fuel was 185 per 1000kg's

Offline pascaly

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Re: How High Can Fuel Prices Go?
« Reply #10 on: February 09, 2011, 08:29:57 AM »
I think they were around $130 or so when I started.....maybe my memory is wrong though.  Ahh, the good old days  ;D

 

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