Government Fleet Top News

Gas Price Run Up Has Government Fleet Managers Reeling

September 21, 2005

SALEM, OR — Daniel Clem's gasoline bill was more than $905,000 last year. Clem is the fleet manager for Oregon's Department of Administrative Services, which is responsible for more than 3,000 vehicles assigned to various state agencies, according to the News-Register. But that's not even half the state fleet. Counting the sedans, vans, pickups, and SUVs in separate fleets, including those of ODOT and the Department of Forestry, the state of Oregon owns about 7,000 light-duty vehicles. The Department of Administrative Services sees only part of the state’s gasoline bill. Nonetheless, that part offers a useful snapshot of out-of-control oil prices. During the 2003-04 fiscal year, the department billed state agencies $709,000 for all types of fuel: unleaded, biodiesel, diesel, and compressed natural gas. So the increase to $905,000 for the fiscal year ending June 30 marked a 28 percent rise in a single year. Prices have soared since then. By the time the current fiscal year ends in mid-2006, the total may run well into seven figures. There's no magic formula for estimating future fuel costs, especially when the state budgets on a two-year rather than one-year cycle, Clem said. The best officials can do is take into account historical mileage and pricing trends. Yamhill County's task isn't quite as daunting, as it budgets one year at a time. Still, it means venturing into the realm of the unknown and unknowable. “We began working on the budget in early February, and at that time contacted several fuel vendors to ask them what their predictions would be,” said Russ Heath, fleet manager for Yamhill County's 218 vehicles. “All of them thought if we based our fuel cost projections at $2 per gallon for regular unleaded gasoline and diesel, we would be okay for another year or so.”That's $2 wholesale, not retail. And it sounded high, as the county was only paying $1.28 for diesel and $1.39 for unleaded at the time. But when the county replenished supplies earlier this month, diesel was wholesaling for $2.13 and unleaded for $2.08. And fuel prices have skyrocketed ever since.

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