PROVIDENCE — The state’s bus system could suffer both a fare hike and a service cutback to respond to financial setbacks, Rhode Island Public Transit Authority officials said yesterday.

RIPTA’s finances are under pressure from two directions — one immediate, from rising fuel costs — and the other impending, from a federal Medicaid cutback, officials said at a meeting of the authority’s governing board.

The pressure comes as the authority is already having trouble carrying a large influx of riders. More Rhode Islanders are taking the bus since the spike in gas prices that began after Hurricane Katrina in 2005.

Adding to the strain, meanwhile, tourist industry officials told the board members yesterday that RIPTA provides excellent service but that their industry needs the continuation of the authority’s green trolleys in Providence and Newport and its ferry service from Providence to Newport.

The immediate budget problem is the rising cost of diesel fuel. General Manager Alfred J. Moscola said that the price of fuel, one of the authority’s biggest expenses, has averaged $2.75 per gallon for the year that began last July 1 and hit $3.12 on Friday, both well above the $2.40 anticipated in its budget. If it stays that expensive, Deputy General Manager Henry Kinch said, it could mean a deficit of $800,000 to $900,000.

Maureen Neira, RIPTA’s chief financial officer, said a fare increase would take effect July 1, when the new fiscal year begins. She said that “We don’t have the numbers” yet to say how much of a fare hike would be needed. Also unclear is how the increase would be distributed across RIPTA’s fare structure. Its last increase, in February 2005, affected a number of its fares including its basic, single-ride ticket, which went from $1.25 to $1.50. But it left a key one, the monthly pass, the same at $45.

The authority’s other problem is the loss in revenue officials expect as an indirect effect of federal officials’ partial disallowance of transportation benefits for the state’s RIte Care health insurance program for the poor. Officials have said that means that as many as 19,000 persons will lose their monthly passes July 1, probably getting instead a limited number of tickets to get to medical appointments. The state Department of Human Services authority operates the insurance program and used federal Medicaid money to reimburse RIPTA for the bus passes.

Reimbursements to RIPTA have grown to $14 million per year, making them a critical part of the authority’s budget. Moscola said that he has assurances from state budget officials that the authority will continue getting the same revenue through the next fiscal year.

But he said that on July 1, 2010, the beginning of the following fiscal year, “The revenue we expected to get will go away,” leaving the authority with a $5-million-  to $7-million budget gap to close. The service cutbacks would take place then.

Of the two things representatives of Newport organizations urged yesterday, by far the cheapest is the continuation of trolley replicas, instead of replacing them with vehicles that are more bus-like.

Moscola has repeatedly said the trolleys are an expensive nuisance to maintain, from their non-standard parts and inability to operate in the snow, down to their clear-finished wooden seats that he said are both uncomfortable and so glossy that passengers slide off them.

Representatives from several prominent Newport groups said Moscola’s suggestions — standard buses remodeled to look like trolleys — won’t do because they are still, really, buses.

Tourists want a vacation that’s different from home, and along with the mansions and Newport’s other attractions, the trolleys provide that, the Newporters said.

John Rodman, marketing director of the Newport Preservation Society, put it this way: “Newport is an adventure” that RIPTA’s trolleys are an important part of, while “a bus is a bus is a bus.”

The tourist industry’s other desire would be much more expensive: the federal money paying the ferry’s operating deficits ends in October, leaving a $450,000 annual gap to fill. RIPTA says it has no money to continue the ferry service.

blandis@projo.com