Aviation: Fuels

Transport written question – answered on 5th February 2008.

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Photo of Paul Beresford Paul Beresford Conservative, Mole Valley

To ask the Secretary of State for Transport what price for aviation fuel (a) for the period to 2030, (b) for the period 2030 to 2050 and (c) for the period 2050 to 2080 is used by her Department in calculating the economic benefits of new runways in its publication, UK Air Passenger Demand and CO2 Forecasts is assumed.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Department for Transport)

holding answer 31 January 2008

UK Air Passenger Demand and CO2 Forecasts (published 2007) reports the latest air passenger demand forecasts and economic benefits of additional airport capacity. It explains (page 88) that aviation fuel prices were projected by combining the Department for Business Enterprise and Regulatory Reform projection of crude oil prices with the strong historical relationship between oil and aviation fuel prices.

The following table shows the resulting projections of aviation fuel prices in 2030 (in 2004 prices).

Oil price scenario Aviation fuel price, £/litre
Low 0.11
Central 0.22
High 0.34

UK Air Passenger Demand and CO2 Forecasts also explains (page 48) that, after 2030, demand at each airport with spare capacity is projected to grow at the rate forecast for the five years prior to 2030. Demand at each airport is assumed to grow no further once its capacity is reached. This implicitly assumes oil and aviation fuel prices would be broadly constant after 2030.

The report further shows that the resulting forecasts and economic benefits of additional airport capacity are robust to a range of sensitivity tests, including oil prices.

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