While most everyone else is saving money at the pump these days, the City of Portland is filling up city vehicles with biodiesel costing almost $7-per-gallon, racking up fuel budget overruns near $300,000.

Two years ago the City of Portland entered into a contract with Oregon farmers to help start producing canola-based biodiesel.

Canola is a commodity, and recently those commodity prices skyrocketed. But 'soy'-based biodiesel is selling for about three dollars a gallon nationally, so buying local is costing Portland big bucks.

The city's Office of Transportation alone is between $260,000 and $320,000 over budget as a result.

Commissioner Randy Leonard, who spearheaded the 'buy local' contract, says the expensive biodiesel accounts for just five percent of all city fuel. He says it's worth paying more to reduce dependence on foreign oil and create a new clean industry in Oregon.

“We knew entering the contract that it would cost more to buy this particular biodelsel,” Leonard told KGW, “but what we wanted was to create the jobs and income for Oregonians.”

Not everyone agrees with the city's strategy.

"Right now people are losing their jobs and losing their business and what is Porland doing? They're spending twice as much as they should for a gallon of gas all for some pet project and to look good," said Jason Williams with the Oregon Taxpayers Association. "Well, we're not interested in looking good. We need to survive."

Commissioner Leonard says he plans to meet with the farmers to see what can be done about reducing costs.

The contract with the farmers is month to month, meaning Portland can cancel at any time.