Somerset Mayor Eddie Girdler says gas companies have been ripping off consumers because of "greed." |
There have been screams of indignation
at the City of Somerset and Mayor Girdler for bringing socialism to
Pulaski County which is a disingenuous claim because the city has
been involved in various areas of private enterprise for decades in
ways that have proven enormously favorable to its citizens. What is
at play here is a general misunderstanding of what socialism is and
the attempt to make political hay from the dispute. Well, there is
no rule that says one has to understand the philosophical
underpinnings of socialist theory and it is perfectly legal to make
political hay any way one can, honorably or not. Just as it was
perfectly legal to overcharge citizens for gasoline, leaving less for
them to use for other necessities, whether it was honorable or not.
A local fuel dealer told me to expect a
whopper of a lawsuit over the issue. I have heard talk of this but I
can't bring to mind any law that has been broken. Another person
said we could expect there to be legislation introduced to prevent
government entities from entering private enterprise. Since such
entities are already involved in all sorts of private enterprise I am
at a loss to see how that could work either. However, the lack of
prospects for success are hindrances to neither.
But, I was told, the city does not have
to pay state taxes and can turn a profit at these low prices. After
a bit of thought it occurred to me that if outlets in surrounding
areas can turn a profit at these prices then why can't our dealers?
It is true that Somerset could probably undercut all the other
dealers but the city has chosen not to do that thereby leveling the
playing fields. With the city the profit motive is not the deciding
factor. It is free enterprise, if dealers want to raise their prices
then they are free to do so.
The other day at a local market I used
my fuel points and bought gasoline for $3.07. That day gasoline was
selling for $3.37. My work truck has a 30 gallon tank so that 30
cent discount will amount to $9 per fillup if the tank is empty.
Most vehicles have a 15 or 18 gallon tank so that same discount would
amount to about $4.50 per fillup. That is a significant number but
at, say, $3.41 that would only be about 75 cents difference for a
fillup. That is not enough to motivate me to make a trip to some
inconvenient place to buy gasoline and I don't think that most folks
would disagree with that. Alternatively, you can see what it meant
when the stations precipitously increased prices 20 cents or 30 cents
at a whack. For my work truck that meant an additional $9 per fillup
and for most it would be an additional $4.50. That is enough to
motivate someone to seek a better deal.
My point being that stations in more convenient locations could easily get away with charging 5 cents or maybe even 10 cents more per gallon without any significant loss of business. The Somerset Fuel Center is not a handy place to get to even if you know where it is. The hue and cry over the city entering this market is all sour grapes and an ideology that does not favor the average person. With any degree of luck this will keep the others a little closer to a reasonable price.
My point being that stations in more convenient locations could easily get away with charging 5 cents or maybe even 10 cents more per gallon without any significant loss of business. The Somerset Fuel Center is not a handy place to get to even if you know where it is. The hue and cry over the city entering this market is all sour grapes and an ideology that does not favor the average person. With any degree of luck this will keep the others a little closer to a reasonable price.
But there are larger forces at play and
it may be advantageous for dealers to keep prices lower than they
need to in order to maximize the perception of being illegally
discriminated against. There are political forces at work that will
try to deny success to the current city government and who will
attempt to portray any success as fraudulent.
My Take is that the action by the City
of Somerset is legal and justified since all attempts at negotiation
had failed. Once free enterprise becomes injurious to the people
then it is incumbent upon government to step in on behalf of the
people it serves. If people like it or don't like it, well, that's
what elections are for.