If you think filling up the gas tank of one vehicle is painful, imagine having to fill up more than 2,000.
The soaring price of gas is putting the squeeze on the City of Edmonton, as it grapples with how to pay for public transit vehicles’ fuel.
“The number of vehicles that use city fuel fluctuates seasonally,” explained Harmalkit Rai, with the City of Edmonton’s financial services department. “We have around 2,250 at any given time in our city fleet.”
Currently, the city is over its fuel budget for this year — which was set back in 2018 as part of the four-year budget — but Rai says there are ways to mitigate that spike and not pass the cost down to taxpayers this year.
“We are managing it within our internal budgets. We’re not looking at any tax levy increases at this time, or any reduction of services at this time. We’re managing it in our internal budgets for 2022.
“We do have a fuel hedge that we use here at the City of Edmonton,” Rai added. “We hedge half of our volume purchases
“That fuel hedge has proven to be quite affective: it’s offsetting and mitigating some of the fuel increases we’re seeing in the last few months.”
But the city will be keeping a close eye on fuel price trends as it heads into budget deliberations for the next four-year cycle.
“We do have our 2023-26 budget deliberations coming up later this fall and if there’s going to be any anticipated long-term increases in gas prices, that’s when we are probably going to be considering how it’s going to be impacting our long-term budgets,” Rai said.
Coun. Tim Cartmell said the city is fairly limited in terms of its ability to increase revenue.
“We have user fees — things like rec centre admissions, transit fares — we have property taxes, and we have grants from other orders of government.
“Council is going to have to look at all of its revenue streams, it’s going to have to look at all of its expense lines, including the expense of fuel to deliver services,” Cartmell said.
He said the budget conversations in the fall will look at how to balance the demands and the costs of service, while minimizing the impact on the taxpayer.
“I don’t know that there is a lot of certainty in the predictions of where things are going to go in the next year, in the next four years,” Cartmell said.
“We’re probably going to have to look at a budgeting approach that allows us to roll with the shifts, create those hedges and try to minimize the short-term impacts that this may have.”
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Earlier in June, the Canadian national average for gas prices surpassed $2 per litre for the first time ever this year, according to GasBuddy and the CAA.
On Wednesday, Alberta’s average sat at $1.896.
Rai calls the rapid jump in costs “an abnormality.”
“We probably haven’t experienced a fuel price increase this quick and this substantial in any recent years over our 2019-2022 budget.”