WICHITA FALLS (KFDX/KJTL) — The cost of diesel is at an all-time high, and it’s starting to hurt more than just average American households.
John Burrus, the Director of Transportation for the City of Wichita Falls, said the price spike can be explained with simple economics.
“What is happening right now though, and it is a supply and demand issue, is we’re seeing historically high prices for diesel,” Burrus said. “Because there’s limited refining capacity, we’re having to pay $2, $2.50 more a gallon than what we were a year and a half, two years ago.”
The shortage in supply for diesel is unlike other recent shortages Americans have faced in recent years. According to reports released this week, the United States currently possesses a supply of just 20 days worth of diesel.
This does not mean that in exactly 20 days, there will be no more diesel in the country. The supply level does not take into account the daily domestic refinery production of diesel, nor does it include diesel imported into the U.S. from other countries.
What it does mean, however, is the supply on-hand of diesel in the U.S. is low, and cities across the nation are beginning to bear the weight of that reality.
Burrus said with supply low and prices high, Wichita Falls is beginning to feel the weight of this diesel dilemma. Perhaps the most complicated factor is how necessary diesel is in order for the City of Wichita Falls to provide civil services.
“It’s firetrucks, sanitation collection trucks, landfill equipment, a lot of our crew trucks, the guys that are working on water lines, all of our backhoes run on diesel,” Burrus said.
Another complicating factor is how much diesel it takes to make all of those services happen on a regular basis.
“We use about 650,000 gallons of diesel per year, so it’s critical that we have a good supply of diesel,” Burrus said.
According to Burrus, the City of Wichita Falls keeps a three-week supply of diesel on hand, about 40,000 gallons, in order to ensure they can serve their citizens.
“Diesel is a critical part of our ability to deliver services,” Burrus said.
Based on Burrus’ estimate of paying around $2 more per gallon of diesel, it’s costing the City of Wichita Falls roughly $1.3 million extra to simply fuel the vehicles and machines that provide services to their citizens.
Burrus believes the U.S. refining capacity has decreased in recent years, and that because of the lowered ability to refine diesel, these problems may not be going away any time soon.
“If we don’t have the refining capacity and don’t increase the refining capacity any time soon, we’re going to have these problems for a while,” Burrus said.
Burrus said the city is currently holding about 50,000 gallons on hand, above what they typically maintain. So despite the national struggles, Wichita Falls is currently in good shape.
However, Burrus is worried about how much maintaining that supply is costing taxpayers.
Burrus also said he worries about what might happen if the nation’s supply continues to fall, and eventually decreases to a week or less in diesel supplies.
“It would have an extremely negative impact on our fuel supply budget for the City of Wichita Falls,” Burrus said. “At that point, I think we’d start working with not only the city manager and city council but our finance staff and we would start looking at budget cuts, not just in fleet maintenance, but probably throughout the whole city.”
If the national supply falls to a week or less of on-hand diesel, Burrus said the ripple effect would be felt not only in Wichita Falls, but all across Texoma. At that point, things would start changing drastically.
“We would prioritize it that emergency response services would get that diesel first,” Burrus said. “If we get to that point, from at least my leadership perspective, I can’t even fathom how they would manage that.”
Burrus said Wichita Falls does have a plan in place, should a day ever come when the city runs completely out of diesel.
The city’s backup plan isn’t novel. The City of Wichita Falls resorted to this method several years ago, when the diesel supply plummeted due to Hurricane Katrina.
“So our backup plan, believe it or not, is to use aviation fuel, such as JET-A,” Burrus said. “It’s a much higher refined product and it is more expensive, but that has always been our plan B.”
Burrus hopes we don’t ever reach that point, however, he said if the supply doesn’t increase soon, we should expect diesel to continue to increase in price, and consequently, the prices of many items to rise as well.