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Somerset, Ky. enters the gasoline retailing business

Started by hbelkins, June 18, 2014, 11:50:51 AM

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hbelkins

http://www.somerset-kentucky.com/newslive/x998003383/City-preparing-public-gas-station

http://www.cspnet.com/fuels-news-prices-analysis/fuels-news/articles/why-somerset-ky-planning-open-gas-station

Personally, I think this is a good shot across the bow against collusion in gasoline pricing. When I posted this on Facebook, I was surprised at the number of people who disagreed.


Government would be tolerable if not for politicians and bureaucrats.


jnewkirk77

I think it's a fantastic idea. It's needed up this way, too.

Avalanchez71

Looks like the city is cutting off it's nose to spite it's face.  This will lead to Mexican type gas retail.  Only the state will sell gas when and where it wants to.  No thanks.

andy

Might be okay if the local government obeys all the rules; property taxes, zoning, regulations, etc...
But when the referee gets in the game, its over.  No way this can remain fair.
The local government should be asking why no competitors come in and punish any fraud if found.
But if there are needlessly restrictive policies or regulations (within their authority), they should get out of the way.

Usually those who created a problem are in the best position to fix it.


Pete from Boston


Quote from: Avalanchez71 on June 19, 2014, 08:11:11 AM
Looks like the city is cutting off it's nose to spite it's face.  This will lead to Mexican type gas retail.  Only the state will sell gas when and where it wants to.  No thanks.

I don't think this will lead to that.

Arkansastravelguy


Quote from: hbelkins on June 18, 2014, 11:50:51 AM
http://www.somerset-kentucky.com/newslive/x998003383/City-preparing-public-gas-station

http://www.cspnet.com/fuels-news-prices-analysis/fuels-news/articles/why-somerset-ky-planning-open-gas-station

Personally, I think this is a good shot across the bow against collusion in gasoline pricing. When I posted this on Facebook, I was surprised at the number of people who disagreed.
I think in theory this is a good idea. If a city statute was passed on how the station will function I think it will work. It's a local government helping it's people, not a hostile takeover of private companies. However it should be closely monitored.


iPhone

corco

This is basically socialism. If collusion is actually occurring, that is illegal, and the proper role of government would be to prosecute that on behalf of its citizens, or to start regulating the cost of fuel, not to start selling gas.

Now, if as with electricity and roads there is a good argument to make that government can leverage its economies of scale to make the provision of fuel more efficient, and it therefore should be a public service then there is merit to this and other socialist ideas, but I doubt a random county in Kentucky had the resources to really study this.

Arkansastravelguy


Quote from: corco on June 19, 2014, 12:21:51 PM
This is basically socialism. If collusion is actually occurring, that is illegal, and the proper role of government would be to prosecute that on behalf of its citizens, or to start regulating the cost of fuel, not to start selling gas.

Now, if as with electricity and roads there is a good argument to make that government can leverage its economies of scale to make the provision of fuel more efficient, and it therefore should be a public service then there is merit to this and other socialist ideas, but I doubt a random county in Kentucky had the resources to really study this.
I don't understand how this is socialism. The city is an entity to sell gasoline. It's not forcing it's citizens to buy there, or manipulating gas prices (an average of other stations is fair). It is not shutting down competitors.
They are using a capitalist idea to provide a service to its' citizens


iPhone

corco

Quote from: Arkansastravelguy on June 19, 2014, 12:42:39 PM

Quote from: corco on June 19, 2014, 12:21:51 PM
This is basically socialism. If collusion is actually occurring, that is illegal, and the proper role of government would be to prosecute that on behalf of its citizens, or to start regulating the cost of fuel, not to start selling gas.

Now, if as with electricity and roads there is a good argument to make that government can leverage its economies of scale to make the provision of fuel more efficient, and it therefore should be a public service then there is merit to this and other socialist ideas, but I doubt a random county in Kentucky had the resources to really study this.
I don't understand how this is socialism. The city is an entity to sell gasoline. It's not forcing it's citizens to buy there, or manipulating gas prices (an average of other stations is fair). It is not shutting down competitors.
They are using a capitalist idea to provide a service to its' citizens


iPhone

Agreed on those points, but if it turns out that those other stations had a reason for those prices, they will go out of business because of government interference. A government entity highly undercutting price probably isn't overt socialism for the reasons you mentioned, but it is a backdoor way into it.

If they are colluding, in fact, and prices would be lower in a fair market, then collusion is illegal so I don't see why they don't just prosecute that. Seems more sustainable and ethical than just blackmailing private gas stations with a public fuel shop ready to go at any given point. This seems like treating the symptoms, when the disease is still out there.I do think government intervention is warranted here in some way, I just really feel like government going into business should always be the very last option considered.

As was mentioned up thread, government is the referee- it is their job to make sure everyone is playing nice. It is not their job to get down on the field and start tackling.

Avalanchez71

Quote from: corco on June 19, 2014, 12:53:38 PM
Quote from: Arkansastravelguy on June 19, 2014, 12:42:39 PM

Quote from: corco on June 19, 2014, 12:21:51 PM
This is basically socialism. If collusion is actually occurring, that is illegal, and the proper role of government would be to prosecute that on behalf of its citizens, or to start regulating the cost of fuel, not to start selling gas.

Now, if as with electricity and roads there is a good argument to make that government can leverage its economies of scale to make the provision of fuel more efficient, and it therefore should be a public service then there is merit to this and other socialist ideas, but I doubt a random county in Kentucky had the resources to really study this.
I don't understand how this is socialism. The city is an entity to sell gasoline. It's not forcing it's citizens to buy there, or manipulating gas prices (an average of other stations is fair). It is not shutting down competitors.
They are using a capitalist idea to provide a service to its' citizens


iPhone

Agreed on those points, but if it turns out that those other stations had a reason for those prices, they will go out of business because of government interference. A government entity highly undercutting price probably isn't overt socialism for the reasons you mentioned, but it is a backdoor way into it.

If they are colluding, in fact, and prices would be lower in a fair market, then collusion is illegal so I don't see why they don't just prosecute that. Seems more sustainable and ethical than just blackmailing private gas stations with a public fuel shop ready to go at any given point. This seems like treating the symptoms, when the disease is still out there.I do think government intervention is warranted here in some way, I just really feel like government going into business should always be the very last option considered.

As was mentioned up thread, government is the referee- it is their job to make sure everyone is playing nice. It is not their job to get down on the field and start tackling.

This would be a good case for a constable if they wanted it.

nexus73

In the Coos Bay-North Bend OR area, the collusion has gone on for decades.  In the 1970's you could come here and see the exact same price at every station whether it was an independent or a branded one.  The way it worked then was that the station owners gathered at a local cafe for breakfast, one guy would say what he thought the price of gas would be, the rest would go along and that was that. 

Today it is more about the local jobbers jobbing us since they also own the stations.  Go 45 miles up the coast to Florence and there you will see a real competitive environment with prices lower than here and even lower than Eugene-Springfield (60 miles away), which is where the pipeline terminates.

Socialism?  Hell, I don't care if it's Stalinism with gulags and executions if it gets gas price gougers dealt with!  We had over 100 local people file a complaint with the state AG years ago (Hardy Myers) and after 2 1/2 years he could find out nothing.  I found out everything within a couple of visits to gas stations where I quizzed the employees.  If you want to count on the state (in Oregon) to save your ass from predatory pricing, think again!

Rick
US 101 is THE backbone of the Pacific coast from Bandon OR to Willits CA.  Industry, tourism and local traffic would be gone or severely crippled without it being in functioning condition in BOTH states.

hbelkins

Somerset is going to buy its gas from a local refinery, the former Somerset Oil Company. There were a number of Somerset stations in the counties around Pulaski, including a station in Irvine (Estill County) where my former boss used to work during the summers as a pump jockey.

Somerset is actually closer to Knoxville than to Louisville, so it shouldn't be held hostage to any supposed monopoly that Marathon-Ashland has on the wholesale market in Kentucky. I remember when I was a kid hearing that some local stations got their gas from a terminal in Louisville, while others got it from one in Knoxville.

I really wish Sheetz would come into northern Kentucky. That might spur some competition.


Government would be tolerable if not for politicians and bureaucrats.

bandit957

Might as well face it, pooing is cool

Captain Jack

I had actually noticed that Somerset was about .30 higher than what I had seen in Corbin on my last trip in that area. I typically don't like to see the government getting involved in matters that should be left to the private sector. With that said, I travel a lot for my job, and really get tired of seeing the spikes and large swings in pricing from market to market. Why is Evansville and Louisville usually the highest places in Indiana and Kentucky, or why is Henderson always about .20 higher than Owensboro and at least .25 higher than Hopkinsville?

Avalanchez71

Quote from: Captain Jack on June 20, 2014, 01:59:05 AM
I had actually noticed that Somerset was about .30 higher than what I had seen in Corbin on my last trip in that area. I typically don't like to see the government getting involved in matters that should be left to the private sector. With that said, I travel a lot for my job, and really get tired of seeing the spikes and large swings in pricing from market to market. Why is Evansville and Louisville usually the highest places in Indiana and Kentucky, or why is Henderson always about .20 higher than Owensboro and at least .25 higher than Hopkinsville?
Is it lower than Evansville?  I seem to recall that the big station on the West side before the bridge seemed to have lower prices.

hbelkins

Louisville is more expensive because of the need for RFG.

Corbin is one of the cheapest markets in this part of the state.


Government would be tolerable if not for politicians and bureaucrats.

SP Cook

It is not really "socialism" but it is an interference with the Market, the only perfect thing that can exist on Earth.  In the Market, every person acts in his own best interest, and his value is exactly equal to his $$.  And Market actors only get some of another Market actor's $$ via a fair exchange in which both felt they were doing the best thing for their own interest.  The Market will respond, in relation to each person's value.  Perfect. 

In politics, every person will also act in his own best interest, however every person's value is exactly equal.  One vote.  And government has the power to involuntarially (under threat of jail and at the point of a gun) to take as many $$ from each person as it wants.  So, unlike in the Market, illogical decisions will be made.  If 50% +1 want gasoline to be $0.99/gallon, then government will sell it for that.  At the expense of others, since values are skewed.  Those who pay the freight are different from those who receive the benefit.

nexus73

Quote from: SP Cook on June 22, 2014, 07:27:39 AM
It is not really "socialism" but it is an interference with the Market, the only perfect thing that can exist on Earth.  In the Market, every person acts in his own best interest, and his value is exactly equal to his $$.  And Market actors only get some of another Market actor's $$ via a fair exchange in which both felt they were doing the best thing for their own interest.  The Market will respond, in relation to each person's value.  Perfect. 

In politics, every person will also act in his own best interest, however every person's value is exactly equal.  One vote.  And government has the power to involuntarially (under threat of jail and at the point of a gun) to take as many $$ from each person as it wants.  So, unlike in the Market, illogical decisions will be made.  If 50% +1 want gasoline to be $0.99/gallon, then government will sell it for that.  At the expense of others, since values are skewed.  Those who pay the freight are different from those who receive the benefit.

That's all fine and dandy for an ideal until the market winds up rigged.  Crony capitalism is just ripping people off with nothing going back to the people, just the pockets of the cheats.

Rick
US 101 is THE backbone of the Pacific coast from Bandon OR to Willits CA.  Industry, tourism and local traffic would be gone or severely crippled without it being in functioning condition in BOTH states.

qguy

Quote from: nexus73 on June 22, 2014, 11:08:25 AMThat's all fine and dandy for an ideal until the market winds up rigged. Crony capitalism is just ripping people off with nothing going back to the people, just the pockets of the cheats.

This is true. Capitalism gets blamed for a lot of things that are true not for capitalism but for crony capitalism. And the really bad thing about crony capitalism is that it usually goes hand-in-hand with crony government, which is as bad, if not worse, and is certainly worse when the two are combined.

Quote from: nexus73 on June 19, 2014, 02:25:47 PM
Socialism?  Hell, I don't care if it's Stalinism with gulags and executions...

I'll take this as well-intended hyperbole, because the only problem with actually saying this is that when enough people say it, that's exactly what you get. Just ask the Russians, the Chinese, the Vietnamese, the Cubans, the...

vdeane

Quote from: SP Cook on June 22, 2014, 07:27:39 AM
The Market will respond, in relation to each person's value.  Perfect.
And this is fair HOW?!?  How much money one has is determined by more uncontrollable factors (how much money your parents have, whether the hiring manager at certain companies likes you, whether disaster hits your home, whether the economy decides to tank into a recession, etc.) than controllable ones.  Something that is so unfair can never be perfect.
Please note: All comments here represent my own personal opinion and do not reflect the official position of NYSDOT or its affiliates.

corco

The more I think about it, the more okay I am with the idea. My first reaction was that this seemed like blatant governmental overreach, but this is local government doing what it can to make the lives of its citizens better. The fact that the system today allowed it to get to the point that government actually opening a gas station and getting into business is the best idea is terrible, and I wish the state and the feds were better at controlling gouging/collusion (a state regulation that requires gas companies to set their price at no more than x% higher than the purchasing price of fuel + the cost of whatever clearly marked and delineated additives (like Techron) that allows station owners to get a reasonable return on investment while also not gouging customers would be something I support since gas is more or less a necessity in rural areas as much as power and water. Evidence also shows that most convenience stores profit off the convenience store side far more than the gas side, in general, which makes it more tenable.).

At the end of the day though, this probably is the only tool available to the local jurisdiction to do something about it, and something has to be done, so it's good that local government is trying something innovative to fix the problem. It just tells me that the system is broken if this is the only thing that can be done.

I would love to see something like this transition into a citizen -owned coop though, where the local citizenry owns the station through some sort of quasi-governmental or even entirely non-governmental, non-profit body. I don't know about in Kentucky, but out in the plains states, gas co-ops are fairly common to help keep down the cost of fuel- though it can be difficult for out of towners to get access to those pumps. I don't know of it being done through government, but the model of fuel co-op in rural areas is that folks basically pay an annual membership fee that covers the costs of pump upkeep and things like that, and then gas is bought more or less at cost. Non-members either pay an inflated rate or don't have access to the pumps. If you wanted to make it a government-run co-op, I guess local taxpayers would pay taxes and get automatic access to the pumps, but then you'd still probably want a member program for people who live just outside of whatever taxing entity.

nexus73

#21
Quote from: nexus73 on June 19, 2014, 02:25:47 PM
Socialism?  Hell, I don't care if it's Stalinism with gulags and executions...

(From qguy) I'll take this as well-intended hyperbole, because the only problem with actually saying this is that when enough people say it, that's exactly what you get. Just ask the Russians, the Chinese, the Vietnamese, the Cubans, the...

Congrats on having an IQ higher than a sponge!  A truly intelligent person would have known it was hyperbole and needed to comment no further.

Rick
US 101 is THE backbone of the Pacific coast from Bandon OR to Willits CA.  Industry, tourism and local traffic would be gone or severely crippled without it being in functioning condition in BOTH states.

qguy

Quote from: nexus73 on June 22, 2014, 09:15:26 PM
Quote from: nexus73 on June 19, 2014, 02:25:47 PM
Socialism?  Hell, I don't care if it's Stalinism with gulags and executions...

(From qguy) I'll take this as well-intended hyperbole, because the only problem with actually saying this is that when enough people say it, that's exactly what you get. Just ask the Russians, the Chinese, the Vietnamese, the Cubans, the...

Congrats on having an IQ higher than a sponge!  A truly intelligent person would have known it was hyperbole and needed to comment no further.

Rick

Congrats on having a personality lower than a reptile. A truly human person would have simply pointed out–without the venom–that I missed the cue.

I would've responded, "Oops, my bad;" we both would've chuckled over the whole thing and been on our way. Now wouldn't that have been much better?

Pete from Boston


Quote from: SP Cook on June 22, 2014, 07:27:39 AM
It is not really "socialism" but it is an interference with the Market, the only perfect thing that can exist on Earth.  In the Market, every person acts in his own best interest, and his value is exactly equal to his $$.  And Market actors only get some of another Market actor's $$ via a fair exchange in which both felt they were doing the best thing for their own interest.  The Market will respond, in relation to each person's value.  Perfect. 

But the Market produced government, because the Market exists in a state of nature, and individuals acting within it attained Success at creating the man-made institution of government.  The Market — which is perfect — did and continues to allow it.  Nothing exists unless the Market allows it.  Government is no exception.

nexus73

Quote from: qguy on June 23, 2014, 02:35:07 PM
Quote from: nexus73 on June 22, 2014, 09:15:26 PM
Quote from: nexus73 on June 19, 2014, 02:25:47 PM
Socialism?  Hell, I don't care if it's Stalinism with gulags and executions…

(From qguy) I'll take this as well-intended hyperbole, because the only problem with actually saying this is that when enough people say it, that's exactly what you get. Just ask the Russians, the Chinese, the Vietnamese, the Cubans, the…

Congrats on having an IQ higher than a sponge!  A truly intelligent person would have known it was hyperbole and needed to comment no further.

Rick

Congrats on having a personality lower than a reptile. A truly human person would have simply pointed out—without the venom—that I missed the cue.

I would've responded, "Oops, my bad;" we both would've chuckled over the whole thing and been on our way. Now wouldn't that have been much better?

Congrats on bringing it out with your approach.  You could have made a better reply too but you chose not to, thus you got the fangs.

Rick
US 101 is THE backbone of the Pacific coast from Bandon OR to Willits CA.  Industry, tourism and local traffic would be gone or severely crippled without it being in functioning condition in BOTH states.



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