While the average highway price of diesel fuel last week was about $3.82 per gallon, the CTA is paying $2.82 per gallon due to price hedging.
“Going forward, 75% of the 2011 fuel budget is hedged at a price of $3.03 per gallon,” CTA President Richard Rodriguez told the board last week. “By contrast, the market price for #1 low sulfur diesel fuel was $3.72 as of close of business Monday.”
The Tribune reports:
Partly because of social unrest in Libya and other oil-producing
countries in the Middle East, CTA officials negotiated fuel-hedging
contracts to cover 75 percent of the diesel the transit agency’s buses
will burn this year. The budgeted price is $3.05 per gallon, or 23 cents
a gallon more than what the agency currently is paying through March.
For the remaining 25 percent, the CTA has both above-market orders and below-market orders in place, Walker said.
“That strategy gives us another opportunity to protect ourselves” if fuel prices continue to rise, she said.
About six months ago, less than 20 percent of the CTA’s fuel budget was being hedged, officials said.