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Danbury City Council receives update on oil contracts

The winter heating season seems to be in the past, and the price at the gas pump for drivers is still low compared to previous years.  As municipalities and the state deal with crafting budgets for the coming fiscal year, there are questions about energy savings.


City Councilman Duane Perkins asked about the CIty's ability to negotiate or enter into new contracts to secure competitive pricing for oil and natural gas.  Danbury already holds several contracts for the fiscal year starting in July.  Danbury locked in last fall for next fiscal year in the range of $1.70 for unleaded and diesel.  Officials said when times are good, the City reaps the benefits, and when times are bad, it's bad.  But they note, that's the risk a municipality takes when they lock in for the next year's budget.


Finance Director David St. Hilaire says when it comes to natural gas, Danbury follows the state.  The City has a "buy as you go" policy and doesn't lock in a price on natural gas.  He says he watches the oil market carefully for several weeks to try to catch the dip in the market, but no one anticipated the bottom falling out like it did.


Perkins asked if oil would get to a price point where it would be compelling enough to enter into a longer contract.  St. Hilaire said if it does, it would be a blended rate.


Crude oil futures prices ended lower on the New York Mercantile Exchange. The near-month contract for the benchmark grade fell 33 cents -- closing at $39.46 a barrel.

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