The demise of SemGroup LP made a bad situation even worse for city and county officials who depended on the Tulsa-based company for road materials.

The cost of cut oils and asphalt had been rising along with crude oil prices. With SemGroup struggling to stay afloat, accessibility is becoming an even bigger problem than it had been with shortages reported nationwide.

Public Works Director Mike Stewart said he received a letter from SemGroup this week stating the city of Muskogee was being classified as a low-priority consumer. The classification, Stewart said, was based upon the relatively low volume of purchases.

SemGroup filed bankruptcy in July, seeking protection from its creditors as it tries to reorganize and restructure its debt. The company filed for Chapter 11 bankruptcy protection after reportedly losing $2.4 billion in oil futures trading.

Muskogee County officials, who relied almost exclusively on SemGroup in the past for much of its road oils, said the struggling company allotted the county 91,000 gallons of the emulsion oil used on chip and seal roads.

District 1 Commissioner Gene Wallace said it takes about 6,000 gallons to coat one mile of roadway. District 1 workers this week, Wallace said, applied about 18,000 gallons.

“It’s available, but we can’t just run up to Tulsa and get it anymore,” Wallace said of the emulsion oil supplies. “We’ve had to go to Missouri, and transportation costs can be considerable” with the price of diesel fuel averaging about $2 a gallon more than this time last year.

Wallace said SemGroup officials based allotments on average annual purchases during previous years. Some surrounding counties, Wallace said, won’t get any materials from SemGroup for the foreseeable future.

In addition to the higher costs associated with transporting materials longer distances, limited supplies are pushing up material costs. Wallace said the county was paying about $41 a ton for asphalt purchased a year ago. Today, a ton of asphalt costs the county about $66.

Officials said the escalating cost of road materials is cutting holes into budgets that have realized only marginal or moderate gains in recent years.

“The price of asphalt is getting so high that it has the effect of having your budget cut,” Stewart said.

David Meuser, public information officer with the Oklahoma Department of Transportation, said the agency has experienced some inconveniences since SemGroup’s bankruptcy filing. He said the asphalt shortage this year was due in part to an increasing emphasis on gasoline refining.

Wallace said while supplies of certain road materials are in short supply, the situation has yet to halt any current or ongoing projects. It may, however, stall some projects in the works.

“We’re having to look at how much material is available, when it will be available, and whether the cost will be prohibitive,” Wallace said.