Business
5:33 pm
Wed August 13, 2014

City-Run Gas Station Makes Waves In Southeastern Kentucky

Originally published on Tue August 19, 2014 7:41 pm

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/.

Transcript

MELISSA BLOCK, HOST:

Now to southeastern Kentucky, where high gas prices have brought about something unusual. In Somerset, the city Council and Mayor have heard years of complaints about the price of gas. So last month, Somerset began selling gasoline to the public itself. Emil Moffatt of member station WKYU, reports.

EMIL MOFFATT, BYLINE: Bob Thomas is filling up in his green pickup truck at a gas station near the edge of town in Somerset. There are no candy bars or 44 ounce soft drinks or lottery tickets sold here. The gas station is a drab, khaki colored administration building. There's no company brand sign anywhere. The gasoline flowing through the nozzle is not being sold by a company, but by the city. The price - $3.36 a gallon.

BOB THOMAS: It should have been this way years ago - fair - you get me? If the people at the refinery is making money on their gas, the city's going to make a little money. I don't mind you making you a living or whenever you come to work for me, pay you a fair wage, but I don't want to send you to the Bahamas on a 30 day vacation though.

MOFFATT: The town's mayor, Eddie Girdler, oversaw the project. He says gas in town has long been higher because of a lack of competition, while median family income is Somerset is lower than the state average.

EDDIE GIRDLER: You know, we're like 14 - $15,000 less. Why should we be paying high gas prices because they can't afford to start with? So we help our economy, we help our nation and we help our commonwealth by doing things that drives down prices so that the consumer are again - the people is protected.

MOFFATT: But not everyone is happy with the way the mayor went about trying to lower gas prices.

CHRIS GIRDLER: Is nothing but a socialist movement towards the government trying to solve everyone's problems, and the government is not the answer - government's the problem.

MOFFATT: That's State Senator Chris Girdler, a distant cousin of the mayor's. But Mayor Girlder points out, there have been no complaints about the city selling compressed natural gas, which he say's they've been doing for the last several years.

E. GIRDLER: 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 business does not get upset, but the day that you sell gasoline - heaven forbid - gasoline to the public then all the sudden becomes a big issue.

MOFFATT: 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. Tom Underwood heads the state office in Frankfort.

TOM UNDERWOOD: 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.

MOFFATT: But energy economist Philip Verleger says it won't be local gas stations that feel the biggest sting, but the oil companies, who may have to cut their wholesale gasoline prices in response.

PHILIP VERLEGER: Legislators will fairly quickly look at this and probably take steps to make this illegal - if they can. You know, this is a real threat to the profits of companies like Marathon Refining, Philips 66 and others.

MOFFATT: Marathon is the leading oil company in this region. A company spokesman says he didn't have anything to add to the dialogue. At commercial gas stations along Somerset's main thoroughfare, Highway 27, customers like Doug Harrison, Delcie Halcomb and Larry Hall weren't too upset about the idea of the city selling gas.

DOUG HARRISON: If it helps the city out, maybe make a little money for the city, keep the area in good shape - I mean, it's a good thing.

DELCIE HALCOMB: If it brings on the prices, yeah it would be great.

LARRY HALL: Well, the prices are down right now and I believe it's because they opened that up.

MOFFATT: In fact, the average cost of gas in Somerset has fallen - it's now 20 cents below the statewide average. Mayor Girdler says that's all he ever wanted.

E. GIRDLER: We couldn't get anywhere and we decided hey, we might as well take a stand - in a small way of saying that we're tired of it, we're going to try to do it and it is working..

MOFFATT: And he says the only people he's worried about answering to are his constituents. For NPR News, I'm Emil Moffatt in Bowling Green, Kentucky. Transcript provided by NPR, Copyright NPR.