High Fuel Prices Cost Transit, Too

By Dave Richards, Community Transit Director of Maintenance

High gas prices are causing individuals to cut back on their driving to save money.
How do fuel costs affect transit budgets?

For every one cent rise in diesel prices, we have an increase in operating costs of more than $31,000 per year. That is just for our fixed route buses. Fuel costs for our automobiles, DART paratransit service and vanpools increase as well.

Fuel, whether it is diesel or gasoline, is an expensive and necessary commodity in the public transportation business. We can’t just suddenly stop serving the customers who rely on us to do the driving for them. That doesn’t mean we can’t take actions to reduce the effects that fuel costs and fuel usage have on our ability to operate efficiently.

For an historic perspective of the volatility of fuel costs, in July 2008 we paid $3.95 a gallon for diesel fuel. In March 2009, we paid $1.28 a gallon. We are currently paying over $3.30 a gallon.
Although Community Transit is not required to pay taxes on the fuel we purchase, the remaining underlying costs do affect our prices and they change daily.

We buy our fuel through a state contract. This allows us to take advantage of discounts based on volume. By buying through this competitively bid contract, we have been able to keep our prices low compared to the regional retail market. We are also looking at the possibility of entering into contracts to reduce the price risk over a specified timeline. Fuel price risk alternatives are currently under study by our Administrative Department.

We have reduced both the need for and occurrences of idling coaches in the lot. When purchasing vehicles, we have evaluated equipment that will reduce fuel utilization and purchased those items when prudent. Examples include the hybrid drive systems on our Swift coaches and on 15 of the new 40-foot coaches that are now arriving to replace older buses. These new coaches also have an electric fan cooling system that will reduce the draw on the engine and, as a result, increase fuel mileage.

A little known fact about large diesel engines is that the newer the engine, generally the poorer the fuel mileage. This has been true since about 1997 when requirements for emissions reductions to reduce pollution were made at the expense of fuel economy.

It has proven to be more and more challenging to predict how much fuel will cost next year or even next month because of the volatile underlying cause and effects of prices. Our mid-year budget amendment includes an adjustment of $2.1 million to pay for the added costs of fuel in 2011. The best we can do is to remain informed and vigilant, be prepared for significant changes and take advantage of policies, procedures or technology that will increase our fuel efficiency.