LCTA, COLT to talk fuel purchasing preferences

BY ERIN MOODY
STAFF WRITER

05/11/2008

 

Although the price of gas at the pump continues to increase, local transportation companies are trying to absorb the costs and keep fares steady for the increasing number of people turning to public transport to save money.

 

The Luzerne County Transportation Authority has been sheltered from the price increases by belonging to a consortium which locks gas prices for hundreds of participating companies and organizations, LCTA director Stan Strelish said.

And now the County of Lackawanna Transit System wants in on the savings, director of development Kurt Kempter said, but the market fluctuations might have made locking prices long-term impractical or impossible. And LCTA is concerned about losing the security a locked price provides.

Both companies hope a Monday meeting will shed light on the future, but regardless, they don’t intend to increase fares.

Since 1992, the Pennsylvania Education Joint Purchasing Council has worked with gas companies to lock gas prices for 12-month periods for dozens of school districts, transportation companies and government institutions. This year, LCTA has been paying $2.28 through the PAEJPC consortium, Strelish said. That contract ends June 30.

“Luzerne County was lucky to get the price they did,” Kempter said.

In contrast, COLT locks prices biweekly. The most recent rate was $3.58 on May 6, he said. Increasing prices drove its fuel costs up to $750,000 for the year, 50 percent more than then was budgeted.

“Up until now we haven’t been part of the consortium but now it’s almost like we have no choice,” Kempter said.

Both transportation authorities are anxiously awaiting a Monday meeting when council representatives will discuss options for this year. With gas prices changing so frequently, it appears it might be possible to lock the price for only three months at a time instead of a full year, said Jeff Kimball, director of the Cooperative Purchasing Service Program for the Susquehanna Intermediate Unit of PAEJPC.

Strelish is hopeful prices will level out or decrease, and said quarterly prices could be the best option.

“I would be leaning toward that type of pricing anyway,” he said. “I don’t know how much higher it can go unless they destroy the country. I guess we just cross our fingers and hope it stabilizes or something.”

The council’s success at locking in low prices has been the vast quantity of fuel required: almost 8 million gallons of various types of gas, Kimball said. In the past, companies have been able to offer lower prices because of the large quantity, but large price increases could now mean large losses for gas companies, he said.

Hopefully, Kimball said, everything will be figured out by the end of June.

emoody@citizensvoice.com, 570-821-2051