Kentucky Mayor Attacks High Gas Prices by Opening City-Run Fueling Station, Gets Accused of “Socialism”

Man pumping fuel

Right as we’ve lost all faith in our leaders, the folks running Somerset, Kentucky, have proved that government can actually do something good for the people it represents. In two words, here’s what they have accomplished: Cheap gas!

Somerset, located about 130 miles southeast of Louisville, refurbished a shuttered municipal gas station and opened it to the public last Saturday. After complaints from some of the city’s 11,000 residents about unfairly high gas prices during the summer, Mayor Ed Girdler decided to run his own station. City officials told the Associated Press that gas stations in surrounding areas have typically been charging 20 to 30 cents less per gallon and that a city-run gas station would bring more people to Somerset, which draws vacationers heading to Lake Cumberland. Almost immediately after the Somerset Fuel Center opened with a $3.36-per-gallon price, the major private gas stations a half-mile away cut prices by about 10 cents to try to match it.

The 10 pumps—all regular grade, plus one for compressed natural gas—are owned and operated by Somerset and the prices set by the mayor’s office. To keep costs low, the fuel comes from a local refinery, there’s no candy for sale and no bathrooms, and the 10 attendants (to handle cash) are city employees on rotation from other departments. The city spent $75,000 to upgrade the pumps and install credit-card machines, and that’s it.

“We’re not putting anyone out of business, we’re just trying to lower prices,” station manager Melody Price told us. “Everyone out here is happy.”

But while drivers love it to the tune of 300 fill-ups per day, local gas station owners and petroleum groups are grumbling over the city’s power play, even crying “socialism.” Girdler says he doesn’t care to make a profit and is charging only enough to cover costs. But there’s no telling how cheap it’ll stay. Unlike nearly every other state, Kentucky’s gasoline excise tax varies with the average wholesale cost of fuel. Just this month, the tax shot up from 28.7 cents per gallon to 31.1 cents and likely will change again during the fall.

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Although one little station in Kentucky isn’t exactly fodder for a Venezuelan-style government gas monopoly, it does raise questions about how—or if—municipalities can compete in private spaces. Expect the next Somerset city-hall meeting to be packed.

About Clifford Atiyeh