Posted on: Monday, September 13, 2004
Soaring gas costs drain on state, city coffers
By Sean Hao
Advertiser Staff Writer
Hawai'i consumers aren't the only ones smarting from the highest gasoline prices in the nation. State and city governments are on track to pay $2 million more at the pump this year — a bill that ultimately lands on the doorsteps of taxpayers.
Government agencies typically cut better deals for fuel than the general public because they buy so much. But they are not immune to the rise in gasoline prices.
This month, the City and County of Honolulu is paying almost $1.40 per gallon for diesel fuel used by TheBus, compared with $1.01 a year ago. That adds up to an estimated $156,000 increase for September alone. With bus fares paying only about one-third of the operating costs of TheBus, taxpayers get stuck with most of the increase.
Just how the government is grappling with the problem varies.
The state has switched to using more regular-grade gasoline and less premium to save money on its fleet of 5,000 vehicles.
The city is counting on new hybrid buses — powered by gasoline and electricity — to cut gas consumption. But one holdout is the police.
The Honolulu Police Department has no plans to end its practice of using only premium gasoline, even though at least one major Mainland law-enforcement agency reported no problems after switching to regular in the same vehicles HPD uses.
HPD spent $2.49 million on gasoline in the year to June 30, compared with $2.17 million the previous year — an increase of $320,000.
On a per-gallon basis, HPD is paying almost $1.55 for premium this month, versus about $1.30 last year. That equates to a $31,250 increase in costs this month, based on monthly consumption of 125,000 gallons of gasoline. If the department purchased only regular gasoline at the city's rate of $1.45 a gallon in September, that monthly increase would be shaved by $12,500 to about $18,750.
HPD public information officer Michelle Yu said the department uses the higher-octane premium gasoline because it increases engine performance.
The main HPD cruiser is the Ford Crown Victoria, which does not require premium gasoline. The California Highway Patrol runs the same cars on regular gas.
"There may be a few cars that require premium, but we pretty much buy regular," said Steve Kohler, a spokesman at the California Highway Patrol's headquarters in Sacramento, Calif. "My understanding — and in talking to my motor pool guys — is that using premium doesn't benefit the engine or increase performance."
Only about 6 percent of cars sold in the United States require premium gasoline, a grade of fuel required to meet octane standards of high-performance, high-compression engines, according to AAA travel club. All gasoline grades contain a federally mandated level of detergents aimed at reducing engine buildup.
AAA travel club said consumers should purchase only the grade of gasoline recommended by their vehicle's manufacturer. Buying premium when it's not required is a waste of money, said AAA California spokeswoman Carol Thorp.
"Most vehicles don't require it," she said. "There is no increase in performance if your car does not need it."
Making the switch
The state has been switching to regular and has been saving $6,700 a month, or $80,400 a year, according to state comptroller Russ Saito.
Overall, the state spends about $190,000 a month on bulk gas purchases and roughly the same on purchases at gas stations using state gasoline cards.
Last year, almost 40 percent of gasoline purchased by the state was of the more expensive midgrade and premium varieties. That was cut to about 30 percent between Sept. 1, 2003, and Aug. 31 of this year, and is forecast to drop to about 21 percent in the next year, according to figures provided by the Department of Accounting and General Services.
State vehicles required to run under heavy loads, such as up hills, are still allowed to use premium, while other vehicles switched to regular have run without problem, Saito said.
Although premium gasoline has a higher octane rating than regular, there is typically no added performance benefit in using it unless a car's engine requires the added octane to prevent engine knock, according to the Federal Trade Commission.
Consumers wanting to reduce their gasoline bill should check their owner's manual to see if their car requires premium and switch to regular if it does not.
'Bus of the future'
The city is taking a different tack with TheBus.
City buses and HandiVans consume about 500,000 gallons of diesel a month, and based on prices this month, they are looking at an increase of $1.9 million a year in fuel costs.
One long-range solution is a conversion of the bus fleet to more fuel efficient, hybrid gasoline-electric buses, said city spokeswoman Carol Costa. Ten such buses start arriving at the end of this month, and although they require a slightly more expensive type of diesel gasoline, they're expected to be nearly 50 percent more fuel efficient.
"This is the bus of the future," Costa said.
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
