CHICAGO (WBBM) – Many of us are sweating a bit about the spiking cost of fuel — but not the CTA. The transit agency has locked in lower fuel prices for 2011.
As WBBM Newsradio 780′s Bob Roberts reports, timing is everything, and CTA Chief Financial Officer Karen Walker said the agency’s energy advisors have counseled the agency well.
LISTEN: Newsradio 780′s Bob Roberts Reports
Walker said Wednesday that much of the work was done, and the price for diesel fuel was locked in, nearly a year ago, anticipating a run-up this year.
“We’re layering in advance,” she said. “We can go out up to 18 months.”
CTA’s hedging is a long-term strategy. Last year it paid an average of $2.71 a gallon, while both Metra and Pace paid less. Year-to-date, it has paid an average of $2.82 a gallon.
Walker said it has locked in three-quarters of this year’s fuel purchases at $3.03 a gallon. Metra and Pace, on the other hand, each budgeted $2.35 a gallon, but continue to buy on the spot market and face huge cost overruns.
A week ago, Pace was paying $2.85 a gallon; Ross said it buys about 6 million gallons of diesel fuel a year. Metra buys roughly 25 million gallons each year; spokesperson Meg Thomas Reile said Friday that its first purchase of 2011, on Jan. 3, was for $2.49 a gallon, and that its most recent purchase last week was for $3.11 a gallon.
The spot price Monday for low-sulfur diesel fuel had jumped to $3.72 a gallon.
Ross said that Pace anticipates a $3 million 2011 cost overrun, but said the Pace board remains committed to holding fares and service levels steady. Metra’s board has yet to discuss the fallout from spiking fuel prices, but is expected to take up the issue Friday.