Friday, November 14, 2008

Government Failure: When the Government Disallows Competition

Heavy-handed federal regulation and red tape makes a victim in Duluth: the government itself, in the form of the US Postal Service. Here is an article (gated) by the Duluth News Tribune on the hopefully temporary wasteful ordeal of USPS managers:

A day after a News Tribune story reported that E-85 gas prices at a Duluth station was 69 cents higher than other stations — and U.S. Postal Service workers were locked into filling their cars there — nothing has changed. ...

“It’s not an option to send them to another route,” he said. “It eats up substantial time, which: A) cuts into the savings of getting cheaper gas, or B) they’re not spending time delivering mail.”

Why not allow carriers to fuel up on regular gas? Nowacky said the Energy Act prevents them from buying regular fuel unless the post office files for a waiver. But Nowacky said by the time it would take to compile the information and data needed to file the waiver, the station probably would have gotten another shipment of E-85 and lowered its prices.

E-85 is a mix of 85 percent corn-based ethanol and 15 percent gasoline. The price of E-85 is normally lower than for unleaded gasoline. The manager of the Interstate Spur said his station’s high price reflects the amount they paid for the fuel.

No comments: