County saves on fuel bill

Pooled purchasing eschewed for favorable gamble on fluctuating 'spot market' in gasoline, diesel

January 25, 2009|By Tyeesha Dixon | Tyeesha Dixon,tyeesha.dixon@baltsun.com

The Anne Arundel County government has saved almost $700,000 in the past three months by buying fuel on the "spot market," rather than through a purchasing pool with other jurisdictions, said County Executive John R. Leopold - one of several cost-cutting measures that Leopold said he has used in recent months.

While several counties in the area, including Harford, Howard, Baltimore and Carroll, buy fuel on a fixed contract, Anne Arundel made the switch to buy on the spot market, in which prices fluctuate constantly. On Dec. 18, for example, a gallon of gasoline was $2.95 for counties that bought with the contract, according to Anne Arundel County. Anne Arundel paid $1.40 a gallon the same day.

Since October, the county has bought 172,000 gallons of diesel fuel and 391,000 gallons of gasoline, according to the county.

If gas prices on the spot market increase, however, the county could pay much more for fuel than the counties on contract do.

"My philosophy is to look under all the seat cushions," Leopold said.

The switch to the spot market for fuel purchases was one of several moves to battle the budget crisis, Leopold said. In October, he announced a third hiring freeze, which he expects to save $3 million. He said the county also saved $800,000 by curtailing take-home cars for many government employees.

"The fuel savings is just another example of the prudent steps we've taken" to cut costs, Leopold said.

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