Killeen council tentatively approves approximately $2.5M in fuel purchases


Observers look over a selection of the city of Killeen's larger trucks during Truck Day, Wednesday, March 13, 2013 at the Special Events Center in Killeen. 

As inflation continues to ripple across the nation, residents and municipalities are forced to play to higher prices for most commodities, including fuel and other essential supplies.

This year, the city of Killeen is expected to pay roughly $2.5 million for about 754,000 gallons of fuel, according to the Killeen Executive Director of Finance Jon Locke.

The price comes out to about $3.31 per gallon.

The high-paying bid renewal is with FleetCor Technologies Operating Company, LLC, a fuel-wholesaling service that provides discounted fuel pricing for fleet vehicles both in and out of Killeen. According to Locke, FleetCor is one of three such fuel service companies that operates in Texas.

Through the city’s contract with FleetCor, it is able to purchase fuel that is 7.5 cents above “rack price,” or the price of wholesale gas, for on-site fuel purchases. For off-site fuel purchases, Killeen will receive a rebate of about 4 cents per gallon for unleaded gasoline and 8 cents a gallon for diesel.

In total, Locke said that the contract should save the city approximately $50,000 annually, though costs are recurring and are subject to fuel price fluctuation.

The city’s current contract ends March 31, and will be renewed through Dec. 31, 2026, once it is officially approved during next week’s City Council meeting.

American Lube Supply

The City Council also tentatively approved a $90,702 contract with American Lube Supply for petroleum products and diesel exhaust fluid.

This is the second attempt to secure a contract for a petroleum products and diesel exhaust fluid products, Locke said, as bids read Oct. 14 would have resulted in an increase of $77,555.

The City Council rejected the bid on Dec. 7, allowing city staff to reissue bids, which were read on Feb. 1. According to Locke, the new bid from American Lube Supply was $47,335 lower than that received in October.

An associated staff report explains that both commodities are used to service Killeen’s vehicle fleet on a daily basis, and that last year’s expenses for both products combined to a total of $60,482.

This year, Killeen is expected to pay approximately $68,826 for petroleum products and $21,876 for diesel exhaust fluid for a total of $90,702, or an increase of about 36% for both products.

All funding is provided through the general fund, and each department is charged on a per product basis.