Ocala officials approved a large fuel supply contract that will supply nearly one million gallons of gasoline and diesel fuel to city vehicles at a wholesale price.

The Ocala City Council voted unanimously to renew a contract with Petroleum Traders during its regular meeting on Tuesday, June 16. The new agreement increases the maximum compensation to an amount not to exceed $3.5 million for the upcoming term, which begins July 1 and runs through June 30, 2027.

During the meeting, Fleet Director John King presented the details of the agreement and explained the logistics of the fuel delivery system to the council.

“Currently, Petroleum Traders delivers fuel in tanker trucks of eight thousand gallons. They will transport that to our various fuel sites. We have three major ones at the complex, MLK, and at Fire Station #6,” said King. “They transport the fuel, diesel, at 9 cents a gallon, and unleaded at 8 cents a gallon. So basically a tanker of fuel costs us about $650 for them to transport it. We use benchmark index pricing called Opus. It’s an oil pricing index that sets up a daily competitive price for fuel at the Port of Tampa.”

As of 10 a.m. on June 16, King reported that the benchmark price was set at $3.39 per gallon for unleaded fuel and $3.86 per gallon for diesel.

“It is at a substantial savings because we are purchasing fuel at wholesale rates versus through retail stations,” explained King about the city’s current fuel acquisition practice.

Before the final vote, Mayor Ben Marciano jested that perhaps the city should wait a week to approve the measure and see if fuel prices decrease given the overall volatility of the marketplace. King assured the mayor that the daily pricing model allows the city to take advantage of market dips.

“We’ll capitalize daily, so as that price fluctuates, we’ll be able to capitalize on it,” replied King.

According to city records, the city’s fleet manages approximately 925,000 gallons of fuel each year for various city vehicles and equipment. The original agreement with the Indiana-based vendor was established after the City of Ocala partnered with Marion County Public Schools in March 2023 to issue a joint solicitation aimed at securing favorable pricing.

The council approved the initial contract in June 2023 for an amount not to exceed $2.5 million, subsequently approving one-year renewals in August 2024 and August 2025 at the same expenditure cap. City staff recommended the new extension, noting that the vendor’s performance has consistently met expectations over the past three years.

Funding for the fuel is included in individual departmental budgets across the city and will be allocated similarly in the upcoming fiscal year.

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