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Why are Winchester's gas prices so high?

May 19, 2008|Chuck Witt

So you think the price of gas here in Kentucky is too high? Well, it is certainly high by historical standards, having passed the inflation-adjusted pricing of the early 1970s. We should at least be grateful that we aren't facing the long lines at gas stations that were endured during the oil embargo of that period.

One of the issues that has arisen about gas prices in Winchester is that they always seem to be higher than virtually all the surrounding counties, and it is not uncommon to find gas at least 10 cents cheaper per gallon in Lexington all the time. In fact, this issue has come before the city commission on at least two occasions within the past couple of months and there seemed to be general agreement that some sort of investigation was justified.

At the city commission meeting of April 1, City Manager Ken Kerns stated that letters had been sent to most of the gas stations in Winchester to try to ascertain price variations. He reported that only two replies had been received, each stating that the local supplier had no control over the pricing.

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Even if this is true, it does not explain why it costs more to supply gasoline in Winchester than it does elsewhere.

Energy company CEOs have testified before Congress asserting that, even though they have reaped huge - one might even say, astronomical - profits in the last few years, they are gigantic companies and the profits are proportional to their overall size.

There may be some kernel of truth in this, but it fails to explain the paltry sums these companies invest in research and the vast sums they pay those same CEOs, often 400 times the salaries paid the typical worker.

Now airlines are shutting down due to high fuel prices and others are tacking on surcharges to each passenger to cover the higher costs of jet fuel.

But typically the United States has fared well as far as gasoline pricing is concerned, even including the federal and state taxes added to the cost of each gallon of fuel.

According to CNNMoney, at least 22 countries have higher gas prices than the United States. England's prices were recently $5.79 per gallon, but many countries tax gasoline quite highly. In some places as much as 75 percent of the price is tax.

As might be expected, the lowest gas prices are in countries with vast oil reserves: 91 cents in Saudi Arabia, 78 cents in Kuwait and 12 cents in Venezuela, although Vene-zuela's prices are heavily subsidized by the government.

Part of the current problem seems to be the lack of refining facilities, at least according to the oil companies.

Regrettably, those companies are rapidly losing the trust of the American people (if they ever had it), so lack of refining capacity may be nothing more than an excuse for exorbitant pricing.

Some in Congress suggest reducing the national gas tax to ease the pain. This would produce only a modest savings and would come at the worst possible time, when those taxes are needed to apply to a crumbling highway infrastructure.

For now the best that can be hoped for is that the city leaders will find a way to even out gas prices here with our lower-priced neighbors, but don't hold your breath.

It is far more likely that the most immediate solution is for all of us to adjust our driving habits by combining trips and driving less often, but the best thing that might come of all this is the possibility that some sanity will return to the buying habits of the American people and that the recent increase in the purchase of fuel-efficient vehicles will be a long-term trend.

Charles L. Witt of Winchester is a retired architect and a community columnist for the Sun.

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