City fuel spending up 20%

Soaring global diesel and gasoline prices are expected to push the City of Thunder Bay’s fuel budget by $420,000 in 2022.

THUNDER BAY – Record gasoline and diesel prices are making their mark on the City of Thunder Bay’s budget, with the municipal government expected to exceed the fuel target by $420,000 by the end of the year.

The estimate is included in a first-quarter financial review released by the city and takes into account industry price projections and historical usage patterns.

Along with a heavy snow clearing season and inflated police spending, rising fuel costs have contributed to a projection that the city will end the year about $1 million in the red.

Gas and diesel are still volatile, but energy analyst Vanessa From GiacomoZwaresh said this year has derailed expectations in a way she hasn’t seen in a decade and a half with the city.

“I have price data and indicators going all the way back to 2005. We’ve never seen the costs that we’ve seen this year – never,” she said. “It’s a unique year. When we did the budget last year, we didn’t expect to see the prices we are seeing. »

The city is trending 20% ​​above the pre-pandemic three-year average for gasoline and diesel spending.

City operations use approximately four million liters of fuel in an average year, including transit, police, fire, EMS and snow removal, From GiacomoZwaresh mentioned.

About three quarters of this amount is diesel, and most of the rest is gasoline, with some biodiesel used in the warmer months.

The city is also continuing to electrify its fleet, although the pace of this transition has frustrated some elected officials.

Gasoline and diesel prices have cooled somewhat since hitting historic highs in March, and From GiacomoZwaresh hopes further relief could come by the third quarter of 2022, but analysts expect costs to remain high.

Prices were already near record highs at the start of the year as the manufacturing sector picked up and COVID restrictions eased. The Russian invasion of Ukraine and the resulting abandonment of Russian oil and gas should keep prices high.

The increases are compounded by the fact that the city’s fuel consumption is returning to normal after a pandemic drop, From GiacomoZwaresh mentioned.

City fleet vehicles refuel at city fuel farms on Front Street, Montdale Avenue, and the Mapleward dump.

The city is issuing a public tender for the supply of fuel, with prices based on the Thunder Bay rack rate, reducing the retail markup at the pump.

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