Ohio laws requires K-8 schools to provide transportation for students who live at least two miles away from school. Virtually every district provides busing for higher level grades.
Mad River Schools has 22 route buses and spends between $90,000 to $120,000 on the roughly 40,000 gallons of diesel fuel it purchases each year from BP Oil. Birtle said district officials are concerned they might see a 25 percent spike in costs this year, as they did in 2008 when diesel exceeded $4 per gallon in 2008.
Some groups fear diesel prices will reach that level again.
The average retail price of diesel in the Miami Valley in January was $3.32 per gallon, the highest it has been since October 2008, according to Avery Ash, AAA’s manager of regulatory affairs.
In Ohio, the average retail price of diesel was $3.01 in 2010, $2.53 in 2009, $3.91 in 2008 and $2.95 in 2007.
Pain at the pump
Dayton Public Schools paid about $1.5 million for 594,971 gallons of diesel fuel in the 2009-10 school year for its fleet of 240 buses. The district is on the last year of a three-year contract that guarantees it receives the fuel volumes it needs, but the cost depends on the market, said district spokeswoman Jill Moberley.
Higher fuel costs means less money in the budget for other needs.
“You try to find economies in other areas that would not impact the classroom,” she said.
Vandalia-Butler City Schools expects to spend about $10,000 more this year on diesel than it did in the 2009-10 school year, when it spent $137,400 on fuel, said Charles Stewart, the district’s business manager.
Buses get about seven to eight miles per gallon, and the district paid $2.50 per gallon on Dec. 17 — far less than the retail price.
The district implemented an anti-idling policy to reduce gas consumption. The district also retrofitted 15 older diesel bus engines to meet federal requirements and shave costs through fuel efficiency.
Huber Heights City Schools expects to spend $219,505 this year on diesel for its 51 buses, 10 percent more than it did last year.
RTA’s rising fuel costs
School districts use a lot of diesel, but the Greater Dayton RTA uses much more.
RTA has 130 buses and 95 Project Mobility paratransit vehicles with diesel engines. RTA vehicles travel about 20,000 miles each weekday and transport about 30,000 daily riders to their destinations, said Frank Ecklar, director of planning and marketing for RTA.
RTA buses and vans used 1.67 million gallons of diesel in 2010, which cost the agency $4.2 million.
With the help of fuel adviser Linwood Capital LLC, the RTA has locked in 40 percent of its projected fuel need for 2011 at a price of $2.63 per gallon. For now, the company is paying about $2.70 per gallon for the rest of its supply, which it buys from Mansfield Oil.
Even with the contract, RTA expects to spend $5.2 million on fuel this year, $1 million more than in 2010.
RTA, which has a $57 operating million budget, has promised not to raise fares this year.
Higher costs affect the bottom line
What explains the spike in costs?
The cold weather and high cost of oil affects diesel prices, said Bob Costello, chief economist with the American Trucking Associations.
Oil accounts for more than half of the cost of diesel, and home heating oil is a distillate, which means when more people use heating oil in winter, prices go up, Costello said.
Since 2008, diesel has been in increasingly higher demand across the globe, whether it is used for construction work in China or the large number of diesel vehicles in Europe, said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.
Diesel prices almost are always higher during the winter months because of the higher demand for heating fuel, which is made from the same heavy oil as diesel, DeHaan said.
Speculation in the futures market also has driven up the price, as traders who believe the demand for diesel will rise are increasingly investing in the commodity. Instability in the Middle East also can affect prices.
“It’s not always just a supply and demand issue,” Ecklar said.
Higher diesel costs do not just affect school districts and transportation agencies — they affect the entire economy.
Trucking companies handle about 69 percent of all total domestic freight tonnage shipped each year in the United States, according to the American Trucking Associations. Virtually all consumer goods at some point travel by truck to reach store shelves.
Fuel costs can account for as much as 20 percent of a trucking company’s expenses, so as fuel prices rise, it has no choice but to increase shipping costs, Costello said. Trucking companies typically have profit margins between 3 to 5 percent.
“For trucking companies, it is typically the No. 2 expense after labor,” he said. “They can’t absorb all of those costs.”
Contact this reporter at (937) 225-0749 or cfrolik@DaytonDailyNews.com.
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