Edited 4/23, 5:00 p.m. to use exact temperature benchmarks, as provided by K. Floren.
Around a meeting table at the California Energy Commission today, some of us were stifling yawns. Then, in one sentence, a veteran weights and measures regulator put the "hot fuel" issue in a perfect frame: Every packaged liquid, from a gallon of kerosene to a quart of milk, is poured into its packaging with the amount adjusted to a benchmark temperature.
Kurt Floren, director of the Los Angeles County weights and measures bureau, explained: All liquids expand when heated and contract when chilled, so to guarantee the same actual amount in every quart of milk, it’s adjusted to a benchmark, 40 degrees Fahrenheit. If the milk going into the carton is 43 degrees, a tad more by volume goes in. If it’s poured at 38 degrees, a little less by volume. But you get exactly the same mass of milk in every carton, give or take a few molecules.
The same goes for a gallon of kerosene sold in a can, though the reference temperature is 60 degrees. Ditto beer and propane. About the only measured liquid sold at retail that is not adjusted for temperature is motor fuel-gasoline and diesel (unless you’re buying your milk from the cow).
What that means in summer everywhere and in warm states (California, Florida, Arizona, etc., you know where you live) year-round is that you lose up to a dime a gallon’s worth of energy on gas that’s 95 degrees going into your tank-not rare in summer. Even a nickel a gallon loss on 80-degree gasoline comes to a buck a tank. It’s meaningful when gas is getting near $4.00 a gallon. (click here for more background on hot fuel)
Even more galling, the wholesaler and the retailer in most states, including California, buy their gas adjusted for temperature. If the gas station takes a 2,000-gallon delivery and the gasoline is 80 degrees, they get a rebate on the 30 or so gallons that were lost to expansion. When it’s sold to us, without that same fair treatment, those 30 gallons are pure profit.
Over several years, wholesalers and dealers sued the oil companies and refiners, and won, to get this temperature adjustment. The only part of the chain that doesn’t get fair treatment is the driver.
Today, there’s growing awareness that hot fuel is a raw deal, because we drivers have absolutely no way to know the temperature of the gasoline we’re buying. Independent truckers, who see their tiny margin being eaten by hot fuel, have sued, too, along with some regular car drivers, on the basis that they have no way to know the actual value of what they pump in the tank, whether gasoline or diesel.
Unless gasoline marketers and their oil company suppliers start getting smart about fairness to drivers, every summer is likely to get a little hotter for the sellers of hot fuel. If a penny’s worth of milk matters, a dollar’s worth of gasoline really matters.
Santa Monica, CA — The sale of “hot fuel” will bring a long,
uncomfortable summer to petroleum marketers, refiners and oil companies
with a federal judge’s across-the-board decision to let a lawsuit
against the practice go forward, said the Foundation for Taxpayer and
Consumer Rights (FTCR) and its OilWatchdog project.
FTCR said the lawsuit, covering a majority of states, should raise
motorists’ awareness that they lose up to a dime a gallon from the sale
of “hot fuel,” especially in the South and Southwest.
“Forcing motorists to buy ‘hot fuel’ is yet another way oil
companies cheat us. Drivers’ losses boost the bottom line of the oil
business, from the oil company down to the retail level,” said Judy
Dugan, research director of Oilwatchdog.org and FTCR. “A major point of
this lawsuit is that drivers have no way of telling the temperature of
the fuel they buy, and thus have no way to determine its true value.”
The ‘hot fuel’ scam occurs because gasoline expands as it warms
up, for reasons including the refining process, air temperature and
solar heating. The expansion means that a measured gallon loses energy
as it warms, providing fewer miles per gallon. When gasoline is sold at
the wholesale level, it is adjusted for temperature variation from the
national standard of 60 degrees. Most retailers also get extra gallons
to compensate for temperature expansion. But consumers can buy fuel
only by a measured gallon, no matter what its energy content, with
warmer gas yielding less energy per gallon. It is notable that in
Canada oil companies adjust retail gasoline sales for temperature,
because colder than average temperatures there would otherwise give
consumers an advantage.
In California and Arizona, ExxonMobil has put stickers on its
pumps about fuel energy being “affected by temperature” as a tactic to
fend off the class action lawsuits against hot fuel sales. (Click here for more information on this story.)
Independent truckers, represented by the Owner Operator
Independent Drivers Association (OOIDA), based in Missouri, say they
lose hundreds of dollars a year from hot fuel. The truckers’ group
noted that the lawsuit is far from finished but relished the fight.
“America’s truckers are closely watching the progress of this
case. They want, and deserve to get the same miles per gallon from
every fill-up. Especially since they are having to buy an extra 200
gallons, or so, every year due to hot fuel,” said John Siebert of the
truckers’ association. “Having jumped this ‘motion to dismiss’ hurdle,
the case is well into the middle of the beginning phase. The judge has
asked the attorneys for their plans for the discovery portion of the
proceedings. For the plaintiffs, this is not such a hard problem: US
fuel consumers found out how retail fuel is really sold, and did so
recently. For the petroleum retail defendants, it’s going to be a
little harder to explain: they’ve known the impact of temperature on
fuel volume since the 1920’s, yet managed to keep it very quiet until
now. As Mark Twain used to say, “The doors will open at 7:00 o’clock…
the trouble begins at 8:00.”
Attorney George Zelcs of Chicago, IL, who originally brought
the case for motorists, also praised the breadth of the decision: “The
oil industry defendants represented to the Court that they had a silver
bullet that would end the case and result in the dismissal of all of
the consumers claims. Their aim was not true.”
The decision by District Court Judge Kathryn H. Vratil moves the case to the discovery stage, the “who knew what, when” stage.
“Today’s legal victory raises the pressure on regulators and
lawmakers to fix the hot fuel ripoff. It is even more important to
motorists with crude oil over $100 a barrel and gasoline prices rising
to match,” said Dugan of OilWatchdog.org.
– 30 –
Santa Monica, CA — The oil industry’s longstanding argument that
high gas prices in recent years were driven by the rising price of
crude oil would leave motorists paying about $4.50/gallon at current
oil prices if the industry claim was accurate, said the Foundation for
Taxpayer and Consumer Rights and its OilWatchdog.org project. The group
said that the current national average of $2.76/gallon spotlights the
profiteering of the spring gasoline price highs and the increasing
politicization of gasoline pricing.
“If crude oil prices were the real driver of gasoline prices,
we’d be paying $4.50 a gallon for gasoline today, based on the $3.25
that drivers were paying back in May,” said Judy Dugan, research
director of FTCR and OilWatchdog.org. “Of course, those record prices
in the spring were not tied to the price of crude oil either.”
In a radio interview in April 2006, the chief oil industry
energy analyst, John Felmy of the American Petroleum Insitute, said
flatly: “The market factors that have caused the price of gasoline to
go up can be traced to the cost of crude oil and the cost of
manufacturing gasoline — nothing more, nothing less.” API
advertisements saying the same thing appeared in print as gasoline
prices rose to records in the spring of 2006 and again this year. (See the Felmy statement here and the API print ad here.)
This argument is inconsistent with reality, charged FTCR, and so
is oil companies’ more recent argument that prices react to
“competitive” supply and demand.
With the price of a barrel of oil hitting $88, the price of
gasoline is flat nationwide and has been that way for two months of
sharply rising crude oil prices, noted the nonprofit, nonpartisan FTCR.
In fact, at $2.759 a gallon, per AAA, pump prices today are
substantially lower than the $3.20 a gallon national average this
Spring, when crude sold for just over $60/barrel.
“There is no way left to connect the price of gasoline to the
price of oil,” said Dugan. “The key factor is what amount of refining
profit the oil companies are willing to seek, and for what reasons. In
the absence of a connection to oil prices, politics is certainly part
of it. This year, threats by Congress to pull back oil subsidies and
pass a law against price gouging peaked along with gasoline prices. Oil
companies and refiners reacted to save their hides.”
FTCR also pointed to last fall’s precipitous drop in the price
of gasoline, which trimmed oil company profits in the weeks before the
November 2006 election. Gasoline prices rose again immediately after
the election, despite falling oil prices, and were further boosted by
President Bush’s announcement in January that he would increase the
size of the Strategic Oil Reserve. (See FTCR analysis of pre-election pricing here.)
If oil companies switch to a “supply and demand” argument about
gasoline prices, that does not get them off the hook for two years’
worth of price manipulation, said FTCR.
“Oil companies exert nearly complete control over the supply of
gasoline, through decisions about their refineries, their oil and
gasoline imports, and the supply they keep on hand,” said Dugan. “They
can roughly tune the supply to match their price targets.” (See OilWatchdog’s report on supply manipulation here.)
FTCR has called for regulation of the supply of gasoline in
order to protect against the manipulation of pump prices for excessive
profit and at times political gain.
– 30 –
Berkeley, CA — Oil giant BP must not be allowed to use a $500
million research deal to turn Cal Berkeley into “UC-BP,” the Foundation
for Taxpayer and Consumer Rights (FTCR) warned today as it distributed
T-shirts to students at a campus rally protesting the plan.
The shirts carried the slogan “I didn’t enroll in UC-BP” and were provided by FTCR’s Oilwatchdog.org project.
FTCR’s John M. Simpson was among those speaking out against the
latest incursion by “Big Oil U.” He said that UC Berkeley must not
allow one of the nation’s leading public universities to be used by an
oil company to unfairly bolster the company’s public image. In addition
BP must not be allowed to set the research agenda or control research
discoveries made in the public interest, FTCR said.
Simpson spoke at a news conference at Kroener Fountain on the
UC campus before a demonstration in connection with an energy
conference co-sponsored by the proposed BP-funded Energy Biosciences
“Universities have an obligation to act in the public interest
and this is doubly true with a public institution,” said Simpson. “We
can’t allow Big Oil, or any other private interest, to subvert the
basic mission of a university to meet a narrow corporate agenda.”
Under the deal proposed last February, UC Berkeley is planning
a $500-million research program with BP to develop alternative fuels.
The deal would create the Energy Biosciences Institute. The BP/Berkeley
deal envisions 50 BP scientists doing proprietary — or secret —
research on campus. The final terms of the deal are still being
negotiated. A contract could be signed by Oct. 15, university officials
FTCR said safeguards must be in place to prevent BP from
controlling the research program, winning exclusive patent rights from
any research products, and “greenwashing” its image in a PR campaign
about the partnership. FTCR is also critical of the secret way the
deal’s negotiations have been handled by the university administration.
The threat to academic freedom and unbiased research at
America’s universities that is posed by Big Oil was the plot of the
season premier of “Boston Legal” last week. Although the ABC Television
show’s plot focused mainly on the situation at Stanford where
ExxonMobil has provided $100 million, “Big Oil U’s” inroads at Berkeley
and Princeton were also mentioned.
“The problem with these programs is that cash-strapped
universities are selling out academic freedom and becoming extension
campuses of Big Oil U,” said Simpson. “The public used to turn to
universities for unbiased research and truth. Without safeguards,
research agendas will be set to match vested corporate interests and
the corporations will control the rights to any patented inventions.”
– ExxonMobil’s $100 million to Stanford’s Global Climate and Energy Project (GCEP)
– Chevron’s $25 million to UC Davis’ Bioenergy Research Group (BERG)
– ConocoPhillips’ $22.5 million to Iowa State University
– BP’s $15 million to Princeton’s Carbon Mitigation Initiative
– BP Foundation’s $7.5 million to Stanford University’s Program on Energy and Sustainable Development
– Chevron’s $12 million to Georgia Tech’s Strategic Energy Institute
ConocoPhillips’ $1 million to Duke University’s Climate Change Policy Partnership (CCPP)
– Chevron gave an undisclosed amount to Texas A&M University
FTCR and its Oilwatchdog project continue to compile institutions that have received oil money.
– 30 –
September 18, 2007
CONTACT: Judy Dugan, 310-392-0522, ext. 305, or cell: 213-280-0175, or Jamie Court, ext. 327, or cell: 310-874-9989
Santa Monica, CA — OilWatchdog.org today challenged Rep. Darrell
Issa of San Diego to debate the merits of fixing the "hot fuel" ripoff
that costs U.S. motorists $2.3 billion a year and California drivers
$450 million in lost fuel energy at the pump. The challenge follows
Issa’s solicitation of a letter from the Federal Trade Commission
intended to support his opposition to fixing the ripoff. (See OilWatchdog’s letter to Issa here.)
The opinion signed by FTC chair and former Chevron attorney
Deborah Majoras, was released by Issa Sept. 5. Its publication jolted
national weights and measures experts because it underestimated the
effect of heat on fuel expansion by more than 90%, and used the faulty
result to conclude that consumers are not harmed by such sales. Rep.
Dennis Kucinich, chair of the House Domestic Policy subcommittee on
which Issa also sits, wrote the FTC to point out its false conclusions.
Majoras apologized and withdrew her original opinion Sept. 11, yet Issa
continues to publish his approving statement on his web site, under the
headline "FTC Rebuffs Democrats Over ‘Hot Fuels’ Fraud Allegations."
In the challenge sent to Issa today, OilWatchdog and its sponsor, The Foundation for Taxpayer and Consumer Rights, said:
"You were present at both House Domestic Policy subcommittee
hearings on ‘hot fuel’ this year and had access to its expert staff
reports. Yet neither you nor your staff spotted the gross calculation
errors in the FTC letter, written at your request. You released the
letter as evidence that there is no reason for retail temperature
compensation of gasoline and diesel fuels.
"The FTC’s analysis understated the effect on retail
consumers from "hot fuel" by more than 90%, according to the National
Institute on Standards and Technology. Consumers lose about a dollar’s
worth of energy, or one-third of a gallon, on a 20-gallon fill-up when
gasoline is at 85 degrees.
Your statement supporting the FTC letter is still
posted on your web site, with only an opaque asterisked addendum saying
the ‘coefficient of expansion’ in the FTC letter was in error. Your
statement still links to the original, erroneous letter even though FTC
chairwoman Deborah Majoras said on Sept. 11, ‘[T]he data we relied on
was wrong. I highly regret the error, and I have directed my staff to
conduct a thorough reassessment of the issue based on accurate data.’
Your site does not link to this second FTC letter."
Judy Dugan and Jamie Court, founders of OilWatchdog.org, said
they want Rep. Issa to debate one or both of them at the time and place
of Issa’s choice.
"Rep. Issa has taken at least $63,000 in campaign
contributions from the oil and gas industry just through 2006," said
Dugan. "His unscientific opposition to even acknowledging the
unfairness of ‘hot fuel’ sales is a slap to his constituents in sunny
San Diego, and a boon to the refiners and marketers of gasoline and
diesel. Voters deserve to hear him explain this contradiction."
OilWatchdog and FTCR have also filed a Federal Freedom of
Information Act request for the Federal Trade Commission’s sources in
reaching its erroneous opinion.
The federal "standard temperature" for fuel is 60 degrees
Fahrenheit. Like all liquids, gasoline expands at higher temperatures
and loses energy. At the refinery and wholesale level, sales of
gasoline and diesel are usually adjusted for temperature, with the
buyer receiving an extra measure of fuel to make up for the expansion.
At retail, however, motorists receive a gallon that is always the same
volume, with no compensation for temperature. U.S. Manufacturers
already produce retail gas pump equipment that compensates for
temperature expansion and contraction, which is a common practice in
Canada. (Canada’s cooler temperatures mean the sellers benefit from
"Rep. Issa needs to either go back to science class or defend
his position in public," said Dugan. "We’re offering him the
opportunity to make his position clear, whether it’s science-based or
– 30 –
The Foundation for Taxpayer and Consumer Rights is a leading
nonprofit and nonpartisan consumer watchdog group. For more information
visit us on the web at: www.ConsumerWatchdog.org and www.OilWatchdog.org.
August 30, 2007
CONTACT: Judy Dugan, 310-392-0522, ext. 305 or cell, 213-280-0175, or
Jamie Court, cell: 310-874-9989 (ISDN connection available, TV
interviews via satellite by appointment through Friday)
"Hot fuel" will take a last summer bite from drivers in the
Washington metro area this Labor Day weekend, said OilWatchdog.org.
When gasoline reaches 90 degrees, which is common in warm regions
during the summer, drivers lose about $1.20 worth of energy on a
"Drivers’ losses boost the bottom line of oil companies," said Judy Dugan, research director of Oilwatchdog.org and its sponsor, the Foundation for Taxpayer and Consumer Rights. "Just driving to the Eastern Shore in a loaded minivan means two fill-ups for many people. Over a year, hot fuel can easily cost $100 or more, the price of a
Most drivers aren’t aware of their loss, though it causes odd
variations in fuel mileage during warm weather. In California and
Arizona, ExxonMobil has begun putting bland stickers on pumps about
fuel energy being "affected by temperature" as a tactic to fend off
class action lawsuits against hot fuel sales. (Click here for more information.)
"The current lawsuits against hot fuel are backed by long-haul
truckers whose bottom lines are seriously affected," said Dugan. "But
they are also supported by individual consumers once they know that
they are being ripped off at the pump."
The yearly national loss to drivers is estimated at $2.3
billion. In the Maryland-Virginia-DC region, federal data shows a loss
estimated at $68 million annually. That figure does not account for
greater mileage driven in warm weather.
Oilwatchdog is countering ExxonMobil by offering consumers "Hot Fuel Ripoff Warning" stickers, available through www.OilWatchdog.org.
The stickers note that U.S. Sen. Claire McCaskill of Missouri
has introduced a "Fair Fuel" bill, S.1997, which would require that
retailers sell gasoline adjusted for temperature. That means a gallon
would be slightly larger when the fuel is above 60 degrees. (Click here to see explanation and text of the bill.)
The House Domestic Policy Subcommittee has also held two
hearings on the "hot fuel" issue, with Chairman Dennis Kucinich of Ohio
sharply questioning executives from Shell and ExxonMobil.
"Oil companies are like a grocer with his thumb on the scale,
out of sight of the shopper," said Dugan. "The Senate’s Fair Fuel bill
would lift that cheating thumb, if legislators can resist the oil
lobby’s efforts to kill the measure."
At a National Conference on Weights and Measures meeting in
Chicago this week, technical experts said a switch to
temperature-measuring fuel dispensers would be relatively simple,
because they are already in wide use in Canada and U.S. companies make
When gasoline is sold at the wholesale level, it is adjusted
for temperature variation from the national standard of 60 degrees.
Gasoline comes from the refinery well above 60 degrees, and in hotter
weather can gain more heat during wait time in aboveground tanks and
transportation to the station. Retailers get extra gallons to
compensate for temperature expansion. But consumers can buy fuel only
by a measured gallon, no matter what its energy content. At the higher
end of fuel temperatures, 105 degrees, the loss is about a dime a
gallon. (The energy loss is 1% for every 15 degrees)
The U.S. military requires that the price of fuel it buys be
adjusted for temperature. But individuals lack the clout to make such a
Fuel-temperature data collected from 2002-2004 by the National
Institute for Standards and Technology found a national year-round
average temperature of 64.7 degrees. The fastest-growing U.S. regions,
the South and West, average substantially higher.
– 30 –
OilWatchdog.org is a project of the Foundation for Taxpayer and
Consumer Rights, a nonprofit, nonpartisan consumer watchdog
organization. Its websites are www.OilWatchdog.org and www.ConsumerWatchdog.org.
August 23, 2007
CONTACT: Jamie Court, (310) 392-0522 ext. 327, or Judy Dugan, ext. 305
Santa Monica, CA –Three months ago, Assembly Speaker Fabian Núñez
stood next to a Chevron gas station in downtown Los Angeles and vowed
in strong language to "curb oil company machinations that drive up
gasoline prices." The Foundation for Taxpayer and Consumer Rights
(FTCR) says in a letter to Núñez that "the result has been a great
disappointment: weak original proposals, harmful amendments and
additional legislation that directly benefits oil companies at
consumers’ and taxpayers’ expense."
FTCR has also asked the state Fair Political Practices
Commission to investigate a $50,000 donation by Chevron, and directed
to "Assembly Democrats," apparently made in connection with a Núñez
fund-raiser April 13 and 14. The donation exceeds by nearly $20,000 the
amount that may be used for electing candidates.
Read the FPPC letter here.
The letter to Núñez additionally criticizes a $100,000 donation
by Chevron to pet cause of the Speaker, a ballot initiative altering
term limits and allowing him to stay in his leadership post for an
additional six years.
Read the full letter to Núñez here.
"Our disappointment about the gasoline-related bills is
magnified by the ability of companies like Chevron to insert money into
the political dialogue and neuter oil industry reforms year after
year," said the letter. "This money pipeline is even more disturbing
when its connections to legislative action are cloaked from public
In the letter, FTCR grades each of the oil industry-related
bills writer or backed by Nuñez, and the average is a disappointing
The letter’s "Report Card" list:
– AB 1552 – Refinery Information. – This helpful bill to
increase the operational, cost, storage and fuel transportation
information that refiners must provide to the state is mostly unscathed
so far. … Unfortunately, none of the specific refinery information
will be made public, under the fiction that it is all "trade secrets."
… Also disturbing is the likelihood, according to legislative
sources, of weakening amendments in the Senate. Grade: B-minus.
– AB 868 – "Hot Fuel." (Davis) – As a remedy for the "hot
fuel" ripoff of motorists, this bill promises no more than studying a
study, with no assurance of any legislative fix. … There is no
question that California drivers lose at least $450 million a year when
they buy gasoline that has expanded to temperatures above 60 degrees.
… The U.S. Senate is already considering legislation (S.1997,
McCaskill) that would require temperature compensation in the retail
sale of fuel. Yet, though California is the most affected state, AB 868
would merely delay a real fix. Grade: D-minus.
– AB 1610 – Refinery Oversight – An originally good bill
that would add some direct state oversight to the operation of
refineries, its current weakened state shows the power of a tiny change
of phrase. [A] brief amendment hands majority control of a new
refinery-operations oversight board to gubernatorial appointees. It
removes from the board … the independently elected Attorney General
and state Controller. The amendments slash any fig leaf of independence
and could create a state-sanctioned defender of the oil industry rather
than a watchdog. Grade: D.
– AB 118 – Biofuel Development – Pretends to be a
successor to last year’s narrowly defeated green-fuels ballot
initiative, Proposition 87. But instead of imposing a modest extraction
fee on oil companies, it cynically puts the full cost burden on
consumers. The measure would undercut any later effort to reap part of
oil and gasoline profits for renewable energy. No wonder the oil
industry’s mouthpiece, the Western States Petroleum Association,
officially supports the bill. Grade: F.
– SB 98 – State Tax Relief – Chevron … stands to be one
of the big beneficiaries of a tax break estimated to cost California
more than $850 million in revenue when fully implemented. You pushed
this last-minute measure through the Assembly as it approved the
state’s budget in a late-night session. SB 98 would allow a company
that has huge sales outside California and substantial property and
payroll in-state (as Chevron does), to use a different [tax] formula
that would substantially cut its state taxes. … at a time when state
programs, including transportation, are being slashed from the budget. Grade: F.
[After this letter was sent, SB 98 was omitted from the final budget deal]
All of the above bills, except for SB 98, have passed the
Assembly and their initial Senate committees, said FTCR. SB 98 was, as
it richly deserved, killed in the compromise over the state budget this
Regarding the Chevron donations, the letter said:
Chevron, for instance, gave $100,000 on July 23 to one of your
chief causes, a February ballot initiative altering term limits that
would allow you to extend your term as Assembly Speaker by six years.
The donation arrived after the weakened oil industry bills passed the
Legislature. Your chief staff consultant, Gale Kaufman, is the
spokesperson for the committee.
We are equally troubled by a $50,000 donation this year by
Chevron to the California Democratic Party that appears to be tied
personally to you. The April 5 contribution is reported by Chevron, in
an atypical manner, as designated for "Assembly Democrats." Sources
within the Democratic Party confirm that these are funds solicited in
conjunction with your "Speakers Cup" fundraising event [in April] …
and which you will dispense. There is no question that raising funds
from the state’s largest oil company for the reelection of your
Assembly members, then quietly compromising oil industry reform bills,
creates a cloud over your office. The easiest course for you to clear
the cloud is for you to return Chevron’s contribution.
– 30 –
August 9, 2007
CONTACT: Judy Dugan, (310) 392-0522, ext. 305, or cell 213 280-0175, or Jamie Court, ext. 327
Santa Monica, CA — Many Mobil and Exxon stations in California have
begun posting small signs on each pump, calling it a "Motor Fuel
Measurement Notice." The stickers, warning that the energy content of a
gallon of fuel varies with its temperature, acknowledge that consumers
are being ripped off, said the Foundation for Taxpayer and Consumer
The nonprofit, nonpartisan FTCR said the stickers are a strategy
to fend off "hot fuel" lawsuits and allow the ripoff to continue.
However, the foundation noted that either a current class action
lawsuit or federal legislation to require temperature compensation of
retail fuel may force oil refiners fix the problem.
"ExxonMobil, America’s most profitable corporation, owes
drivers more than a cheap sticker in tiny print," said Judy Dugan,
research director of FTCR and its OilWatchdog.org project. "The company
has funds that it uses to help dealers with infrastucture, and which
could be used to buy nozzles that adjust fuel volume for higher
Newly introduced legislation in the Senate (S. 1997), by Sen. Claire
McCaskill of Missouri, would require gasoline and diesel to be sold
adjusted for temperature, giving motorists a fair gallon’s worth of
energy for their money. (See information on the legislation here.)
"Consumers and lawmakers are increasingly aware that there is a
thumb on the scale when they buy gasoline, even though they have no
fairer alternative for purchasing it," said Dugan. "The Senate’s hot
fuel bill is a warning oil companies, refiners and distributors of
gasoline that they can either make gasoline sales honest themselves or
be forced by the courts or government to do it."
Gasoline, especially in the summer, expands as its temperature
rises. But fuel is sold by volume at a benchmark of 60 degrees, so
drivers are paying for "ghost gas," the lost energy content of a gallon
at any temperature above 60 degrees. At other parts of the supply
chain, the gasoline is sold temperature-adjusted, meaning slightly more
gasoline is provided at higher temperatures.
The year-round temperature of fuel at the pump in California
averages 74.5 degrees, and higher in summer. The national average is
64.7 degrees, according to a study by the National Institute of
Standards and Technology. At $3.00 a gallon, and with fuel at 75
degrees, motorists may lose 50 cents or more per tankful to "ghost
gas." (Click here for more information and background on "hot fuel".)
ExxonMobil said that it would put stickers on its pumps at
stations in California and Arizona. A survey of six stations in Los
Angeles and Santa Monica, however, found the stickers only at
Exxon-owned and franchised stations, not at independently owned but
branded Exxon and Mobil stations. (Click here for the original announcement.)
– 30 –
The Foundation for Taxpayer and Consumer Rights (FTCR) is
California’s leading nonpartisan consumer advocacy organization. For
more information, visit us on the web at: www.ConsumerWatchdog.org and www.OilWatchdog.org.
July 17, 2007
CONTACT: Judy Dugan, 310-392-0522, ext. 305, or cell: 213-280-0175
Santa Monica, CA — ExxonMobil will put decals on its gasoline pumps
in California and Arizona acknowledging that "hot fuel" may not deliver
the full value of a gallon of gasoline, according to a report in the
industry publication Oil Express. Exxon took the step to protect itself
from class-action lawsuits that accuse marketers of defrauding drivers
with "hot fuel," said the Foundation for Taxpayer and Consumer Rights.
FTCR said ExxonMobil, the world’s largest oil company, should
have announced plans to fix the problem, which would have gained its
brand market share and consumer confidence. Instead, said FTCR, the
company is just fending off lawsuits and making drivers angrier.
"A cheap decal is like a tobacco pack warning," said Judy
Dugan, research director of OilWatchdog.org and FTCR. "It may be Teflon
against lawsuits, but it offers no protection to consumers. The cost of
each decal may be less than the 50 cents a fill-up that consumers are
paying for ‘ghost gas,’ the lost energy of fuel sold at high
The Oil Express report says the wording of the decal will be:
"This device dispenses motor fuel by volume measured in
gallons. It does not adjust the volume for variations in the
temperature of the fuel. The temperature of motor fuel affects the
energy content of each gallon dispensed."
"The loss is perhaps 50 cents per hot full tank for individual
motorists, and the collective loss to motorists in California alone is
estimated at about $450 million a year in California," said Dugan.
"ExxonMobil can’t evade its responsibility to sell gasoline fairly and
honesty with a decal essentially saying ‘Yeah, we rip you off and what
are you going to do about it.’ "
ExxonMobil’s action follows a similar decal warning ordered by
refiner Tesoro at its California stations, including the small USA
Petroleum chain and more than 250 Shell stations recently acquired by
Tesoro. At the time, other companies denied that they would follow
suit, said FTCR.
U.S. manufacturer Gilbarco already makes a gasoline pump nozzle
that measures the temperature of gasoline as it leaves the pump, and it
is widely used in Canada (where sellers benefit from lower gasoline
temperatures). The head of the California Weights and Measures board
has stated that the pump may be sold and used in California, but
Gilbarco has declined to offer it for sale.
Gasoline is adjusted for temperature variations from the
national standard of 60 degrees when it is sold by the refinery to
distributors, and when it is sold again to retailers. At each stage,
the buyer receives extra gasoline to make up for expansion and energy
loss if the fuel is over 60 degrees. However, the fuel is sold without
any temperature adjustment to motorists, causing an annual loss of $2.3
billion to drivers nationally. In California, the statewide average
year-round temperature of gasoline is over 74 degrees, according to a
"Sales must be honest to be fair. Yet the industry from the
refinery level on down cheats both motorists and taxpayers by
pretending that fuel is 60 degrees in order to fatten their own
profits," said Dugan.
The Oil Express article said ExxonMobil would require the decal
at its company-owned and franchised stations, and would "encourage"
others that sell the ExxonMobil brand to display the decal.
– 30 –
The Foundation for Taxpayer and Consumer Rights (FTCR) is
California’s leading nonpartisan consumer advocacy organization. For
more information, visit us on the web at: www.ConsumerWatchdog.org and www.OilWatchdog.org.