Kentucky Town Now Selling Gas

Somerset StationFollowing years of residents’ complaints over local gas prices, the Kentucky city of Somerset has opened up its own pumps to the public.

By David Bennett, Senior Editor.

After much anticipation on the part of motorists—and hand wringing by local gas retailers—the city of Somerset, Ky. opened its new fuel pumps to the public Saturday, July 19.

Somerset is thought to be the only municipality in the country to sell its own gas.

John Minton, who represents Somerset’s Ward 8, has been pushing a city-operated fueling site for the last three years. The infrastructure was in place because it’s the same facility that fuels the city’s vehicles, school buses. Since Somerset is now converting its fleet to compressed natural gas, revamping the fuel center to accommodate private vehicles seemed in the cards.

Kicking the idea of providing motorists city gas around for nearly three years, the councilman said the fuel center program was the last viable option to help stabilize fuel costs in their town.

“Every holiday, every weekend, I’ve seen gasoline jump here 30, 40, 50 cents on the gallon just over night, for no reason, and our neighboring towns—until the last two or three weeks—you could drive anywhere in a 50-mile radius and buy gas cheaper than you could in Somerset,” said Minton, a Somerset councilman since 1994.

However, the city’s attempt to shift the balance of gas prices back in its favor has been met by heavy criticism from local retailers.

“What is this going to do as far as throwing a monkey wrench in a naturally occurring competitive landscape that is now going to be thrown off kilter by an entrant that doesn’t have to play be the same rules as everybody else,” asked Ted Mason, executive director of the Kentucky Grocers Association and Kentucky Association of Convenience Stores. “I think that’s the huge concern. As you know, the margins in fuels are so thin and you by the time you pay credit card interchange (fees), by the time you make some money of your gasoline you’re doing well. I think there’s a lot of concern from people who do have substantial investments—whether you have a single convenience store in the Somerset area or the larger chains; everyone is concerned about this precedent occurring.”

Read the full article in the August issue of Convenience Store Decisions.

  • brian

    1 of 3 things will happen. 1 they will lose tax payers money. 2 they will make 11 cents per gallon like everyone else. 3 they will get greedy and try to make more than 11 cents per gallon and go out of business and lose tax payer money.

  • John_Doe12

    Its not a level playing field in that they collect tax revenues from the non government stations and use those revenues to compete against them. also their fuel supplier is in the same tax district, so whats to say that their supplier gets some tax break in order to get a better deal for their fuel operations. I wonder what their water and sewer rates are in comparison with the surrounding towns?

  • http://andrewsullivan.thedailybeast.com/2012/01/the-chinese-century-is-a-myth.html AmericanMillennium

    Hey what’s the big deal. It’s not socialism at all. There are city workers in every arena from plumbing to public waste and construction that can be handled through private sources. When the city comes to unclog your storm drain do you run out of the house yelling “socialist”? But because it involves “gas” everyone gets nervous.

    Local towns are not confined to “socialist” labels. They ARE competing in a free market…there are 20 thousand other towns wanting to attract your business and your tax dollars. If you think this is against your principals you are FREE to move to one of the other 19,999 towns. Socialism is an inescapable founding national principal. This IS NOT “Socialism.”

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