"The annual ritual of this small dealer group dragging us all through the mud and misleading legislators and the public has to end.  Let’s work together on real, substantive solutions to what are very real problems...."

CONFIRMING FEAR - True or False

[Cromwell, CT]  The day John Kennedy was inaugurated as President 75% of the American people believed government did the right thing most of the time.  Thirty-three years later on the day that Bill Clinton was inaugurated President, only 25% of the American people believed that government did the right thing most of the time.

As our cynicism as a people has grown, we believe in less and less and that leaves the panderers and those who appeal to our fears stronger and more influential.  Those who address energy issues are no exception, and debates about gasoline prices fit right into this mold.  Even though we buy larger and less fuel efficient vehicles, even though our consumption increases, even though we consume so much it exceeds our ability to produce enough here at home, even though we pile more and more taxes on gasoline, even though there hasn’t been a new refinery built from the ground up in this country in 30 years, even though government has fooled with gasoline formulas and additives so often that there are 40 different types sold around the country – many of those who address our concerns about energy prices and gasoline would rather pander to our dislike and distrust of big business than address the root causes of energy problems. 

Ever wonder why in all the bloviating we hear about the massive profits of multinational energy corporations that not once In recent years has even one of these energy giants been investigated, indicted, tried or convicted of having broken a single state or federal law with regard to prices?  Some are great at pointing fingers of blame and fanning the flames of our suspicions – but those same people are very short on real solutions.

For the last ten years the Connecticut Legislature has been dragged through endless debates about gasoline issues, most of which have nothing to do with the statewide price of gasoline. Legislators have been falsely led to believe that passing legislation ending certain property rights and giving those rights to others will lower the price of gasoline. Fortunately, the General Law Committee of our Legislature has always seen through the scams each and every year, but that didn’t prevent the scams from coming back again and again. 

Imagine passing a law that said if you sold your home you had to sell it to me - and then passing another law that said you had to sell your home?  That is just one example of the type of legislative scam pulled by a small dealer group led by Mike Fox, all the while he tried to convince legislators that such a thing would lower the cost of gasoline. 

For several generations our local businesses have invested millions in our state. These are businesses that employ thousands of our citizens, have worked to clean up the environment, create jobs, pay taxes and provide quality products and services to the public. While a small dealer group has sought to use the Legislature to rewrite the leases they signed, nothing got done about the real, substantive issues we could have been addressing.  The annual ritual of this small dealer group dragging us all through the mud and misleading legislators and the public has to end.  Let’s work together on real, substantive solutions to what are very real problems.

1. Gasoline in Connecticut generally costs more than gasoline in Massachusetts and Rhode Island and that hurts our businesses along the border.  Why are our prices higher?  Because Connecticut charges the highest combined state taxes on motor fuels of any state in the entire Northeast.  See it here > http://www.icpa.org/consumer_motor.htm  If we want good roads, bridges, mass transit systems and we also don’t want to have toll roads – we pay for these transportation initiatives off of the motor fuels we buy.  Connecticut today collects about 36c a gallon in two state taxes on gasoline and collected more when prices rose.  The state nets 10 times more than your local gasoline retailer – yet no one suggested that the state was gouging.

2. The only difference between the average price of gasoline in Connecticut and the average price of every state around us in this region is the taxes the state imposes on gasoline.  Connecticut ’s biggest influence on reducing the cost of gasoline can be on either lowering taxes or lowering the speed limit.  Everything else is just conversation.

3. No, motor fuels do not all sell for the same price at every gas station everywhere – and they shouldn’t.  Does every accountant charge the same everywhere?  Every home does not pay exactly the same property taxes.  Every business has somewhat different labor costs and expenses.  Competitors should all have different prices.  If consumers want the same price for everything, everywhere then we should be under the Department of Public Utility Control where, like the electric utilities and our paying the highest electric rates in the nation, we could be controlled.  Well, maybe we don’t want to be just like the system that has given us the highest electric rates in 48 states.

4. There is no mystical, magical thing we can do here that takes Connecticut out of the world of energy markets and somehow reduces our gasoline prices.  Yes, there are alternative fuels and all the domestic ethanol and biofuels production is more expensive than conventional fuels and won’t decrease our costs a dime – and all require massive public subsidies.  Most won’t simply tell you the truth in this regard – alternative fuels do reduce foreign dependence but they do not reduce cost.

5. You come along and lease my station from me – a property I own, I risked millions on, I paid for – and the deal is I let you run my station but you buy gasoline from me.  If you don’t like the deal, don’t sign it.  Don’t presume you can sign the deal and then run to the Legislature and cry foul.

6. Most buy their gasoline with a credit card today.  Credit card companies charge us between 2% and 3% of each sale just for the privilege of our offering consumers the chance to charge their gas. On every $40 fill up, the credit card companies charge we retailers $1, or about 6c per gallon. The credit card company nets more than the retailer, yet no credit card company has been accused of gouging consumers.

7. Prices are higher in one area than another….

First, we all understand that in a free market anyone can go to a community, in Fairfield County or anywhere else, and set up a gas station if the local government and zoning laws allow for it.  For every person complaining about the apparent unfairness of this economy there is a huge business opportunity for someone to buy land, build stations and lower gasoline prices.  Here’s what to do.

We’ll need to buy two acres of land in, let’s say, New Canaan to start.  According to the local real estate prices the two acres will cost around one million dollars. [$1 million].  To put up a reasonably attractive service station-convenience store with six multiple product dispensers and canopy will cost another two million dollars [$2 million].  Now we’re sitting on a three million dollar [$3 million] investment and need to pay our local property taxes, utilities, comply with all the state and federal health, safety & environmental regulations, stock our convenience store [another $150,000 to start] and hire some help.

We’re going to do all this for a net return to us after expenses and taxes of around two cents [2c] per gallon.  To anyone for whom this sounds like a terrific business opportunity, please give us a call. 

If you hear anyone claiming it should be done – ask them to do it.

Every business attempts to set the sale price of its products or services based on its costs.  Like it or not, it costs more to set up and pay for running a service station in New Canaan than in communities with lower property taxes or labor costs.  Unless the town fathers of New Canaan are prepared to offer land and taxes for less than market rates demand in New Canaan, then the price of what is sold in New Canaan will reflect that market.  If some want to pander to the public and claim that the laws of economics don’t exist, they can do that all they like but doing so doesn’t repeal the laws of economics.

We are not major oil companies and our offices are here in our state. We represent Connecticut businesses that employ Connecticut citizens.  When we come before the public and the legislature it is to discuss what can really be done to lower costs for everyone. 

GASDA likes to pander and distract us into thinking we can help one party by eliminating the rights of another. GASDA likes to pander to anyone’s belief that the root of all evil is found in large companies or that there are easy, simple solutions to resolving massively difficult energy problems. 

We need serious people with serious views to address energy issues.  The side show is over and it’s time the GASDA circus left town.

XXX

ICPA represents more than 500 Connecticut based independent businesses. These businesses employ 13,000 Connecticut citizens and supply the majority of our state's 1,600 motor fuels outlets and 350 heating fuels dealers. ICPA's offices are at 10 Alcap Ridge, Cromwell, CT  06416.  For more information about today's Press Release, contact Gene Guilford or Chris Herb.