ANNAPOLIS – When Prince George’s County officials put their fiscal 2000 fuel budget together back in November 1998, fuel prices were low and stable. Even so, they added another 5 percent to their estimate, just in case.
Fuel prices have risen 65 percent since then, and they are still rising. But state and local government officials, like those in Prince George’s County, aren’t worried. Yet.
“I haven’t gotten a call yet,” said Carolyn Scriber, an official with the Prince George’s County Office of Central Services.
“We haven’t looked at the numbers yet to see if we’re in trouble,” said Scriber, whose agency bought 3.5 million gallons of gasoline and diesel fuel for the county’s 4,500 vehicles this year.
Part of the reason local governments might not be sweating the increase is the fact that many are banking huge budget surpluses this year — the state alone is touting a $940 million surplus.
Even so, the steadily rising fuel prices could amount to millions in unanticipated costs for governments this spring, cutting into budget surpluses that officials could have used elsewhere.
“Nobody could have predicted this,” said Dave Humphrey, communication director for the Maryland Department of General Services.
DGS will buy 9.5 million gallons of fuel for the state’s 15,400-vehicle fleet this year and sell that fuel back to state agencies. Humphrey said DGS is charging agencies $1.23 a gallon for gas, 66 percent more than last year, and $1.71 a gallon for diesel, a 126 percent increase.
“DGS will probably be over budget,” Humphrey said.
Industry and government analysts have attributed increasing fuel prices to limited oil production by the Organization of Petroleum Exporting Countries and an unusually harsh winter, among other factors.
But Michael Rothman, an oil analyst with Merrill Lynch, said that fuel prices should begin to level if OPEC increases oil production as expected. Rothman said that, at most, consumers might see five or 10 cents more a gallon by summer.
Officials in Dorchester County were concerned about the fuel prices for a different reason. Besides the million gallons of gasoline, diesel and heating fuel needed for county vehicles and schools this year, they expect to buy about 500,000 gallons of asphalt, a byproduct of the gasoline distillation process.
“We’re going to be tight without transferring money,” said Elvin Thomas of the Dorchester County Highway Department.
Dorchester, like most Maryland counties, buys oil products in bulk to bring prices down. But even in bulk, fuel prices still fluctuate with the market.
And Thomas, like most other officials around the state, could not have foreseen the need to budget for the high prices that the market is bringing this year.
“We didn’t budget it,” said Thomas.