ALBUQUERQUE, N.M. (KRQE) – Gas prices in New Mexico continue to be near record levels. Practically everyone is feeling the pain at the pump. But not the city of Albuquerque. It has been able to save millions of dollars when filling up its fleet of vehicles.
The city of Albuquerque uses what is called a fuel hedging program. They bid for gas at a fixed rate for the year. If gas prices rise above the fixed rate the city is able to save money. If it drops below the rate, the city has to make up the difference. The soaring gas prices allowed Albuquerque to get a huge settlement back.
“We received about 4.6 million dollars last year in settlements from this fuel hedge, so that brought our net costs from just under 16 million to 11.7 million, so that was a significant savings from what we would have otherwise incurred if we had been unhedged,” says Chris Daniel, Chief Investment Officer for the City of Albuquerque.
The fuel hedging program lets the city buy gas for police vehicles, dump trucks, and city buses. Due to the way the hedge was set up, whenever gas prices reached a certain level, then the city could receive payments back.
Chris Daniel who oversees the program for the city, says that if the city can keep fuel costs down through the hedging program, then those costs don’t trickle down into tax increases for citizens. And with high gas prices, it’s a relief for many residents who say they hope things get better.
Steven Lucero is a local resident and says the fluctuating gas prices take a toll on everyone. “But it’s like, it hurts the pocket, it hurts the pocket. Sometimes you don’t even want to go out anywhere, because you got to save that gas to go anywhere you need to go. And usually, I use it for emergencies, go around and get what I need to do, and go right back home. That’s all I can say, is it’s too rough, it’s really rough.”
Daniel says they were able to lock in the fuel price for this fiscal year at $3.37 a gallon. He says the city is looking to transition to only using electric vehicles in the future. The city currently has more than six thousand vehicles that make up its fleet and more than two hundred of those are either electric or hybrid vehicles.