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Governments Feel the Fuel-Price Pinch

Posted on: Monday, 22 August 2005, 21:00 CDT

Aug. 20--Motorists are not the only ones in shock at high gas prices: Government and transit agency officials are nervously eyeing rising fuel costs and making adjustments, such as entering long-term contracts, buying fuel-efficient cars, and reducing their fleets.

Pennsylvania, which annually buys from 10 million to 12 million gallons of unleaded gasoline and about six million gallons of diesel fuel for its fleet of more than 38,000 vehicles, plans to purchase 30 alternative-fuel cars this year. The state has reduced its fleet by 788, of which 228 were gas-chugging sport utility vehicles.

"The cost per year of hybrid-vehicle ownership is greater than standard vehicle ownership, but fuel costs have gone up so much, it now makes sense to do this," said Frank Kane, a spokesman for the Pennsylvania Department of General Services.

In Philadelphia, which budgeted $7.9 million this fiscal year to gas up its 6,000-vehicle fleet, officials say rising prices could leave them $5 million short in their fuel budget. Last year, the city's gas budget came up $3 million short, according to city officials.

Across the river, NJ Transit budgeted $49 million for diesel fuel this year, $15 million more than last year. Even so, agency officials say they may need to spend an additional $13 million to make ends meet. The agency cited security concerns and rising gas prices as reasons for its July 1 fare increase.

NJ Transit spokesman Dan Stessel said that the agency expected to absorb the rising cost of fuel within its $1 billion annual budget but that gas costs were "certainly worth keeping a close eye on."

As of Thursday, the average price for a gallon of unleaded gas in Philadelphia and its Pennsylvania suburbs was $2.64, up 72 cents from last year, according to a survey by AAA Mid-Atlantic. In New Jersey, the average price per gallon of unleaded gas in Burlington, Camden and Gloucester Counties was $2.50, also up 72 cents from last year.

Although governments and transit agencies usually pay less for fuel because they often buy in bulk and by contract, their costs are also increasing.

"Rising oil prices have a tremendous impact on the state because they are a significant part of our spending," Kane, of Pennsylvania's Department of General Services, said. "Rising oil prices raise the price of just about everything we buy."

Philadelphia Budget Director Dianne E. Reed was more optimistic. There is no need for alarm because the city is only two months into its fiscal year, but later this year it may be a different story, she said.

"It's the sort of thing that has to be worked out," Reed said.

Last year, the city paid an average of $1.51 for unleaded, up from 82 cents in 2003, and $1.64 for diesel, up from 76 cents in 2003.

Reed said Philadelphia's situation could have been worse had the city not reduced its fleet by 332 vehicles and entered into a wholesale contract with Sunoco.

The city also started using PhillyCarShare, which leases the city fuel-efficient gas/electric cars on a per-use basis.

"We have been saving money compared to what we would have paid," Reed said, "but we're still over budget."

Many municipalities have tried to take some of the sting out of spiraling fuel prices by forming consortiums.

Warminster, for example, joined forces with other Bucks County townships to buy gasoline. But problems remain.

Andy Witt, Warminster's fleet foreman, said the township, which buys about 60,000 gallons of gas annually, was now paying $1.70 a gallon.

"A couple years ago, it was 82 cents a gallon. Last year, it was 92 cents," Witt said. The township faces a $47,000 increase over last year's fuel bill, he said.

In Montgomery County, municipalities are feeling a pinch even though most have fuel contracts that insulate them against some of the shock, according to Matthew M. Lahaza, Abington's assistant manager.

Abington is part of a 32-member Eastern Montgomery County consortium that takes bids once a year for many staples, such as fuel, rock salt, and traffic signs.

But soaring fuel prices also have raised the cost for other products, Lahaza said, such as the asphalt (which contains petroleum) used for street repairs.

Ed Miccolo, Abington's director of public works, said he was paying $29.95 per ton of asphalt, about $2 more than a year ago. Abington buys about 12,000 tons of asphalt a year.

Montgomery County's government, which at this time last year was paying $8,000 a month for gasoline, is now paying $12,000 a month. The county has 350 vehicles, according to its Web site, used by everyone from county police and prosecutors to road crews and youth and family counselors.

The impact on the county's multimillion-dollar budget is unclear, said county spokesman John Corcoran.

In Media, officials increased budgeted amounts for fuel by $8,000 for the Police and Highway Departments when a routine midyear update was done, said Jeffrey A. Smith, the borough manager. The money was shifted from different departments to keep the budget balanced, officials said.

Next month, talks will begin for the 2006 budget, and fuel prices will be a major concern. "It's more money than we had anticipated," Smith said. "It's out of our control, but we'll do the best we can."

SOME TIPS FOR CONSERVING FUEL

--Avoid quick stops and starts. This can save up to two miles per gallon.

--Avoid aggressive driving, which lowers gas mileage.

--Avoid excessive idling.

--Replace or tighten loose, damaged or missing gas caps, which can allow gasoline to vaporize.

--Keep tires properly inflated; underinflation can cause poor gas mileage.

--Replace worn spark plugs.

--Replace dirty air filters. They waste gas and cause engines to lose power.

--Combine errands to reduce vehicle miles

--Take unnecessary weight out of trunks or back seats.

--Take public transportation or carpool.

Source: Pennsylvania Department of Environmental Protection

Contributing to this article were Inquirer staff writers Tom Avril, Barbara Boyer, Larry Fish, Nathan Gorenstein, Robert Moran, Kellie Patrick, Don Sapatkin, Jeff Shields and John Sullivan.

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Copyright (c) 2005, The Philadelphia Inquirer

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Source: The Philadelphia Inquirer

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