The City of Aurora will buy $5 million worth of fuel in advance if it can get a good price.
The Aurora City Council will voted unanimously Monday to put fuel prices for 2024 out for competitive bid. Companies under consideration for the contract include Chief Petroleum, Hill Petroleum, Offen Petroleum and Rhinehart Oil. These vendors will provide price quotes on unleaded and diesel fuels.
“Each of these firms has a contract with the City of Colorado Springs through a competitive process bid they conducted,” city staff wrote in a memo to the City Council. “The process for contracting for fuel is unique in that it requires a commitment to lock unit prices before awarding a contract to the selected vendor. Additionally, this commitment may require a decision to lock within one hour of receiving favorable prices in order to capture the best pricing for the city. As a result, it is crucial that staff have advance authority to commit the city to a contract before participating in the competitive locking process.”
Price-locking fuel now will allow the city to avoid surprises down the road, city staff explains in the memo. “By taking advantage of an opportunity to lock pricing for 2024 during 2023, the city can avoid potential budget increases due to price increases that may occur in the future. (The) $5 million contract capacity is recommended due to continued supply, demand, and pricing risks in the market.”
The actual cost of the fuel for 2024 may be below $5 million, the memo explains, and will be finalized in early or late fall 2023.