LINCOLN, Neb. -- The city of Lincoln, Neb., is looking into the possibility of getting back into the gasoline business, reported the Lincoln Journal Star. It opened a gas station in the mid-1920s and sold gasoline until the 1960s, when the station quietly closed, said the report. The city still has the authority to get into the business, an authority the U.S. Supreme Court upheld.
Mayor Coleen Seng said she has directed staffers to look at bringing back a city-owned station and using its profits to help build city streets. The city has an estimated $135 [image-nocss] million in unfunded street needs. Her staff will study such issues as how much it would charge per gallon and how much it would cost to operate, the report said.
Seng's chief of staff, Mark Bowen, said they have discussed the idea for a couple of months, but that it is all preliminary. It's something we're going to keep looking into to see if it's a realistic possibility or not, he told the newspaper. It's worthy of taking a look at.
He said the idea of people being able to buy gasoline with the knowledge that some of the money would help improve city streets is intriguing. But Mark Whitehead of Whitehead Oil Co.which supplies or operates 36 stations in Southeast Nebraska, most in Lincolnsaid Seng probably does not realize how tough the industry is. I think it's somewhat shortsighted to think that this is going to be some sort of panacea or way for the city to make money, he told the paper. It doesn't seem like it's a wise investment for city tax dollars.
When told any profit could go toward improving streets, Whitehead responded: And the deficit would go?
The industry is competitive and price-sensitive and sees a lot of turnover, he said, but customers do not always see it because ownership can change hands without many visible signs at stations. It can cost several hundreds of thousands of dollars just to buy tanks, dispensers and a canopy, he added.
You end up getting into a business where you put a couple million dollars of investment in and sometimes have to sell for a nickel and as much as 10 cents per gallon under cost, he said. That makes it pretty difficult to recoup those costs.
Since he also supplies gasoline wholesale, however, Whitehead said he would love to talk to the city about supplying any venture.
According to local historian Jim McKee, in late 1924, former Mayor Charles Bryan successfully amended the city charter to allow the city to sell gasoline and oil at cost plus operating expenses and contingencies, the report said.
Only Lincoln residents were to be served, although vehicles with foreign license plates could be served if the drivers said they were from Lincoln.
At one point there were complaints that the price, a half-cent over cost per gallon, was undercutting the competition. Councilman Edgar Duncan was defeated in the mayor's race after being criticized for running the station at a profit and questioned about travel and advertising expenses. He was defeated by Verne Hedge, who ran in opposition to government meddling in private business.
The U.S. Supreme Court affirmed the city's right to run a station, said the report.
As reported in CSP Daily News in late March, Lehi, Utah, near Salt Lake City, said it plans to build a station to ensure a supply of gasoline to the city in case of an emergency. It would be leased to a private operator.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.