With fuel prices soaring, the City of Vernon is anticipating a steep fuel budget shortfall.
The city’s 2022 Fleet Services department has an approved fuel budget of just over $487,000, which covers all departments not including the RCMP. This amount was forecast when the 2022 budget was prepared last July, when the city was paying $1.37 per litre for gas and $1.26 for diesel.
However, with fuel prices skyrocketing, the city is now looking at an estimated fuel budget shortfall of $270,000 for 2022, if current prices persist.
“Oil and fuel prices have been extremely volatile in 2022,” reads a memo to council dated March 15, explaining that as of that date the city is paying $1.81 per litre for gasoline and $1.99 for diesel.
The city says the volatile fuel prices have also led to a significant rise in the cost of vehicle parts and supplies, with tire prices alone increasing by 19 per cent since January.
“Non-local vendors are also adding additional fuel surcharges to regular purchase prices,” the memo states.
If vehicle parts and supply prices stay as high as they are currently, the budget for those expenses will be exceeded by 10 per cent, or $50,000.
To brace for the potential shortfall, administration has recommended that council allocate $320,000 of the 2021 unexpected and uncommitted balance. Administration would report back at the end of the year with actual costs and determine how much of the allocated funding was needed to support fleet operations.
Council will review the matter at its next regular meeting on Monday, March 28.