CTA rejects big fuel discount offer

Citgo deal too good to miss, officials tell cash-short agency

By Virginia Groark
Tribune staff reporter
Published January 5, 2006

The Chicago Transit Authority's president dismissed Citgo Petroleum Corp.'s offer to provide discounted diesel fuel for its buses and instead called on the Venezuelan-owned company Wednesday to buy at least $15 million in fare cards for the poor if it wants to help provide low-cost transit.

CTA President Frank Kruesi was responding to criticism from politicians and community leaders who urged him earlier Wednesday to accept Citgo's offer--which the CTA and critics agree could save at least $15 million-- and roll back its Jan. 1 fare increase. Otherwise, they said the cash-strapped CTA could face problems when it goes to Springfield to seek more money for mass transit.

"I can assure CTA management that they will not be well received in Springfield as we prepare the 2007 budget," said State Rep. Larry McKeon (D-Chicago).

But Kruesi said Citgo does not provide the type of fuel that CTA buses use, and consequently hasn't bid on CTA fuel contracts. Citgo's diesel would clog filters in nearly 300 of the CTA's roughly 2,000-vehicle bus fleet, causing the buses to break down, Kruesi said. The remainder of the fleet would spew twice the amount of emissions into the air if it used the fuel, he said.

"If we accepted this proposal, we would not be able to run reliable transit service," Kruesi said. "Our buses would be stranded all over the region, and we would be doubling our emissions in the buses that use it."

A spokesman for Citgo, part of Venezuela's state-owned oil company, would not comment on remarks by the CTA or its critics.

The issue stems from the company's new program to help distribute discounted heating oil to poor U.S. residents who live in areas with cold winters. In an unusual initiative for Venezuelan President Hugo Chavez, known for his anti-American rhetoric, the program was launched in the fall in the Boston area and in the Bronx, according to the company's Web site.

But in Illinois, most people rely on natural gas or electricity to heat their homes. So Citgo worked with Alds. Ed Smith (28th) and Billy Ocasio (26th) to approach the CTA in November with an offer for a discount of as much as 40 percent on 7.2 million gallons of diesel fuel, officials said. The same month, the CTA board approved raising fares and eliminating cash transfers to help offset rising fuel costs.

At a news conference in a Loop hotel Wednesday morning, Ocasio said Citgo has offered to provide whatever type of fuel the CTA needs.

But Kruesi said Citgo has been working with non-profit agencies, not government agencies. He also said the CTA is not equipped to determine who would be eligible for discounted rides that Citgo says should be provided in exchange for the fuel.

Instead, Kruesi said that the company should purchase unlimited ride passes and have community groups distribute them to the poor.

U.S. Rep. Luis Gutierrez (D-Ill) said it was ludicrous for the CTA to reject the offer.

"I would call on other oil companies who are reaping record profits to follow Citgo's lead," Gutierrez said.