Fuel prices higher than expected, Peoria sees nearly $300K shortfall

For the first six months of Fiscal Year 2019, fuel prices were about 12 percent higher than projected during budgeting at this time last year, resulting in a shortfall, according to a city report. [Submitted photo]

By Philip Haldiman
Independent Newsmedia

Peoria experienced a nearly $300,000 shortfall in budgeting for gas for its fleet services division.

For the first six months of Fiscal Year 2019, fuel prices — both diesel and unleaded – were about 12 percent higher than projected during budgeting at this time last year, according to a city report. The report stated while prices have stabilized and have begun dropping in the first part of 2019, they are still not at budgeted levels, nor will they make-up for the deficit incurred in the first half of the year.

As a result, the fleet services division is projecting it will need to purchase about $166,000 in unleaded gasoline beyond its $600,000 budget, the report stated. City staff further projects it will need to purchase $85,000 more in diesel fuel beyond its $800,000 budget. Additionally, tire usage and expenses were not budgeted to properly to reflect the needs of the city’s fleet and will require $47,000 in tire repairs and purchases beyond its $340,000 budget for Fiscal Year 2019.

In total, the shortfalls, based on the commodities market, amount to $298,000 in Fiscal Year 2019. Providing the additional resources will ensure the inventory levels of fuel and tires are available to supply city departments, the report stated.

The council approved a transfer in that amount from the General Fund Contingency account to Fleet Maintenance to cover the shortfall.

Fleet services is responsible for servicing and fueling all city vehicles, with the exception of Peoria Fire-Medical Department, which services its own vehicles due to their technical complexity.

AAA spokeswoman Michelle Donati-Grayman said that surprisingly the metro-area saw gas price averages this past January about $.45  more expensive year-over-year. This was not the trend for the majority of the nation, but wasn’t abnormal for the west coast states, she said.

While January prices were more expensive, the bulk of February and March had year-over-year averages that yielded differences more like $.10-$.15 more expensive, she said.

“AAA expects the national gas price average to increase another $.25 through spring and summer. That said, prices in Peoria will continue to go up, reaching at least $2.75 and depending on demand/inventories, shoot a little higher.”

 

Philip Haldiman can be reached at 623-876-6743 or phaldiman@newszap.com.



You are encouraged to leave relevant comments but engaging in personal attacks, threats, online bullying or commercial spam will not be allowed. All comments should remain within the bounds of fair play and civility. (You can disagree with others courteously, without being disagreeable.) Feel free to express yourself but keep an open mind toward finding value in what others say. To report abuse or spam, click the X in the upper right corner of the comment box.