City-Run Gas Station Makes Waves In Southeastern Kentucky
After years of complaints about high gas prices in Somerset, Ky., the city council and mayor did something about it. Last month, Somerset began selling gasoline to the public.
"It should have been this way years ago — fair," says Bob Thomas as he fills up his green pickup truck at the municipal Somerset Fuel Center.
The price is $3.36 a gallon, lower than the statewide average. Somerset Mayor Eddie Girdler oversaw the project. He says gas in his town has long been higher because of lack of competition while median family income in Somerset is lower than the state average.
"We're like $14,000 to $15,000 less. Why should we be paying high gas prices because they can't afford to start with," Girdler says. "We help our economy, we help our nation and we help our commonwealth by doing things that drives down prices so that the consumer, or again, the people, is protected." But not everyone's is happy with the way the mayor went about trying to lower gas prices. "It is nothing but a socialist movement towards government trying to solve everyone's problems. And government is not the answer; government's the problem," says state Sen. Chris Girdler, a distant cousin of the mayor's. But Mayor Girdler points out there have been no complaints about the city's selling compressed natural gas, which he says it's been doing for the past several years.
"It's amazing that you can put an energy form like natural gas into vehicles to sell to the public and your politicians and your big business does not get upset. But the day that you sell gasoline — heaven forbid!" he says. "[Selling] gasoline to the public then all of a sudden becomes a big issue."
The Kentucky office of the National Federation of Independent Business doesn't like the city gas station either and says government competition isn't fair to local businesses.
"Our members are really getting up in arms about this, and we'll be approaching the Kentucky General Assembly to see if we can find relief there," says Tom Underwood, who heads the state NFIB office in Frankfort.
But energy economist Philip Verleger says it won't be local gas stations that feel the biggest sting, but the oil companies, which may have to cut their wholesale gasoline prices in response.
"This is a real threat to the profits of companies like Marathon refining, Phillips 66 and others," Verleger says.
Marathon is the leading oil company in this region. A company spokesman said he didn't have anything to add to the dialogue. At commercial gas stations along Highway 27, Somerset's thoroughfare, customers weren't too upset at the idea of the city selling gas. "It helps the city out, maybe make a little bit of money for the city, keep the area in good shape, I think it's a good thing," said Doug Harrison. Others say reducing the price of gas is key.
"The prices are down right now, and I believe it's because they opened that up," said Larry Hall. The average cost of gas in Somerset has fallen. It's now 20 cents below the statewide average. The mayor says that's all he ever wanted.
"We couldn't get anywhere, and we decided that hey, we might as well take a stand in a small way of saying that we're tired of it ... and it is working," he says. He says the only people he's worried about answering to are his constituents. Copyright 2014 Western's Public Broadcasting. To see more, visit http://www.wkyu.org/.