Denton city leaders are feeling the pain at the pump.

The City Council on Tuesday approved a $900,000 budget amendment to cover the higher-than-expected cost of fueling city vehicles through September. The city also plans to boost its fuel budget significantly for the fiscal year that starts Oct. 1.

“Fuel prices are going up,” city spokesman John Cabrales said. “We are projecting they are going to continue to go up next year.”

Gasoline was averaging $3.88 per gallon nationwide Monday, up $1.04 from a year ago, according to data from the Energy Information Administration, an arm of the U.S. Department of Energy. Diesel fuel was averaging $4.50 per gallon, up $1.60 from last year.

In addition to the higher prices, Denton is also dealing with the closure of the city’s Biodiesel Industries plant, which produced and sold discounted biodiesel fuel to the city. The city sued Biodiesel Industries Inc. and its local affiliate for breach of contract in May, saying the company failed to produce enough fuel and ceased production without warning.

The lawsuit is pending in federal district court.

The council’s vote Tuesday brings Denton’s budget for gasoline and diesel to more than $4.3 million this fiscal year. More than $388,000 of the increase will go to the solid waste department, which relied most heavily on biodiesel, Cabrales said.

“Solid waste by far is the biggest user of our fuel,” he said. “And the fact that we no longer have access to that … biodiesel has begun to have an impact.”

The city’s fleet services department buys fuel in bulk and sells it to other city departments and the Denton County Transportation Auth­ority with a surcharge, which allows the department to pay for itself, Cabrales said. DCTA and city departments that buy the fuel will have to find money in their existing budgets to cover their portion of the $900,000 budget amendment, he said.

The proposed fuel budget for 2008-09 is $5,266,700. The city also plans to add 21 vehicles to its fleet of 1,135 to meet the needs of a growing population, Cabrales said.

In the meantime, city departments are looking at ways to reduce their fuel use. The police department has already made several changes, including increasing bicycle patrols and prohibiting the use of unmarked vehicles for personal business, Cabrales said.

The city isn’t the only local government scrambling to address fuel prices. In June, Denton County leaders said a spike in fuel costs would eat up most of the county’s $400,000 contingency fund for energy. County commissioners later passed budget amendments to cover the increased expenses.

LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com