McLean County Entities Lock In Fuel Savings as Diesel Hits $4.50 a Gallon

Q: Why can one school district secure fuel for $2.10 a gallon while its neighbor pays crippling market rates?

District 87 is paying about $2.10 a gallon because it locked in fuel earlier through large bulk purchases and a supplier contract, while Unit 5 is more exposed to spot-market pricing when fuel is needed. The key difference is procurement strategy, not geography. District 87 buys 40,000 to 50,000 gallons at a time from Ken’s Oil Service and renegotiates only after working through that supply, using its 18,000-gallon storage to manage deliveries. That lets it capture prices set before the latest run-up and avoid buying every load at today’s market. Unit 5, by contrast, only partially contracts fuel and often buys at prevailing prices, so sudden spikes hit its budget directly. The broader reporting shows the same pattern across local governments. Bloomington, Connect Transit and others have used fixed-price contracts, annual agreements or fuel risk management systems to shield themselves from volatility. Agencies that secured terms in advance are paying well below open-market rates; those that did not are absorbing the full increase. There is also a timing risk. Unit 5’s finance chief noted that a pre-COVID bulk buy backfired when prices later fell, showing that locking in fuel is not always a win. But in the current market, districts with storage capacity, larger-volume purchasing, cooperative or long-term contracts, and stronger fuel-risk planning have a clear advantage over neighbors buying closer to real time.

2 articles · Updated · WGLT · Jun 17

$37,000 in June fuel purchases left McLean County paying $3.70 for unleaded and $4.50 for diesel, up from about $28,000 two months earlier as road-work season and global energy costs lifted bills.
Bulk and fixed-term contracts are cushioning some agencies from that spike: Bloomington buys about 42,000 gallons a month under a risk-management deal at $2.38 unleaded and $3.58 diesel until October, while Connect Transit locks in annual fuel at $3.19 diesel.
Normal is leaning more on efficiency than price shopping, with Mayor Chris Koos saying fuel prices are up about 50% year over year while usage slipped 1% and the town pushes to electrify smaller fleet vehicles.
School districts show the trade-offs of timing the market: Unit 5 said spring price spikes hurt its budget and much of its fuel is now bought at market rates, while District 87 is still drawing on contracted fuel near $2.10 a gallon.
The wider impact reaches beyond pumps, with Bloomington warning higher oil prices also raise asphalt and resurfacing costs, squeezing public budgets even where fuel hedges are in place.