Fuel costs strain US transit systems

ALBANY, N.Y. -- Mass transit systems nationwide are considering cutting service, laying off staff, raising fares, and delaying capital spending to meet rising diesel fuel prices. The spike at the pumps could cost public transportation systems as much as $750 million more a year.

While most public transit authorities are not raising fares yet, they have explored ways to cut costs and save money. Some have eliminated routes or run them less often and have ended overtime, said William Millar, president of the American Public Transportation Association.

In Boston, the MBTA is now projecting a $20 million surge in fuel costs this fiscal year, double what it had projected last month. Daniel A. Grabauskas, general manager for the Massachusetts Bay Transportation Authority, said yesterday that his agency budgeted $32 million for gasoline, compressed natural gas, and heating oil but now expects to spend $52 million based on current prices.

The MBTA has a fixed-price contract for electricity, so the cost of powering the subway system will not change. ''There is a laundry list of different things we are doing to reduce costs, including keeping our personnel head-count down," Grabauskas said. ''We are now operating with 233 positions under what's budgeted."

When the fiscal year began July 1, the T was paying $1.72 per gallon for low-sulfur diesel fuel used in its buses, said spokesman Joe Pesaturo. That number peaked at $2.33 a gallon in late September and is now at $2.06.

The T has not proposed any fare hikes or service cuts, though Grabauskas said ''that's always a possibility if we can't continue to manage the spiraling costs of fuel." He hopes something positive will come of the price spikes: More commuters will park their cars to save on gas and ride the T instead, boosting fare revenue.

If prices remain high, the Capital District Transit Authority, based in Albany, will spend about $900,000 more than anticipated for fuel by the end of its fiscal year, officials said.

The Denver Regional Transportation Authority is considering a fare increase of 25 cents on local routes. In Salt Lake City, the Utah Transit Authority is proposing a 25-cent-per-ride fuel surcharge.

''Fuel prices have more than doubled, and we're anticipating a $6 million shortfall in the 2006 budget year," UTA spokesman Justin Jones said. The Utah authority is spending $2.65 a gallon for diesel fuel -- $1.44 more per gallon than it had expected to spend. The surcharge, to be voted on by the authority's board, will help make up $2 million of the shortfall.

In 2004, the Denver RTA spent $1.11 a gallon on average, spokesman Scott Reed said. As of last week, it was paying $2.44. That will leave the Denver RTA about $11 million over budget for the year.

Charles Seaton, a spokesman for the New York City Transit Authority, said that over the summer the authority was paying about $1.81 per gallon of ultra low-sulfur diesel fuel. Now it's paying about $2.44.

The authority, with 4,600 buses, burns through 900,000 gallons a week.

Lucas Wall of the Globe staff contributed to this report from Boston.