SCS----Socialist City of Somerset

Somerset Mayor Eddie Girdler says gas companies have been ripping off consumers because of "greed."

Just from observation I would guess that 80% or more of the people I have listened to are in favor of the city selling gasoline if it will bring down the artificially high pricing we have endured for years in this area. It is no shocking news to hear that the cities around us are 20 cents or 30 cents lower than we are per gallon. Since Somerset announced the date the city would start selling gasoline the prices locally have fallen steadily until the city started selling fuel at a price based on the average of surrounding areas. Today gasoline is selling mostly at or around $3.29 per gallon. If the city had not gotten into the business you can be assured the price would be $3.59 and then it would drop 2 cents per day until a magic number was hit and then it would jump overnight by 30 cents per gallon. It is ludicrous to blame that on supply and demand because the markets just don't work that way. I don't really think that the dealers are as much to blame as are the distributors. But I do think that the dealers realize that we do not have a free and open market and are more than willing to take advantage of whatever the market will bear. Caveat Emptor, let the buyer beware. But, just for the sake of argument lets say that a buyer did not want to pay the going price, what are his options? There are no outlets selling below what the local markets set the rate at and that lone person does not have the capability to travel 30 or 40 miles to buy cheaper gasoline even if that would move the market. The question of why all the dealers are so high is what? The only logical answer to that has to be that the price from the distributors has risen. But why? Why is it that much more expensive to deliver gasoline to Somerset than it is Corbin or London or Monticello? The answer is that it is not that much more expensive. The difference is due to the whims of the distributors and the dealers don't have that much choice.

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.

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.