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'Hot Fuel' Adds To Pump Pain | Oil Watchdog

'Hot Fuel' Adds To Pump Pain

Fri, May 23, 2008 at 11:11 am

    'Hot Fuel' Adds To Pump Pain

    ‘Hot Fuel’ Adds To Pain At The Pump

    A survey shows that Californians could be overpaying as much as $3.4 million a day as heat makes gas expand.

    Soaring gasoline prices are bad enough. But this summer, California’s
    higher temperatures could add an additional 8-cent-a-gallon wallop
    because pumping warmer fuel gives motorists less energy per fill-up.

    "Consumers are paying through the nose for gas today, and they’re
    really angry," said Public Citizen President Joan Claybrook, who at a
    Thursday news conference urged consumers to back proposed federal
    legislation that wouldrequire gas pumps to take account of fuel’s
    tendency to expand in warm temperatures.

    Because of the so-called hot fuel phenomenon, she added, this summer
    "just about everyone will be overpaying for the gas that they
    purchase." Claybrook said the temperature hit could cost customers an
    extra $3 billion nationwide.

    In fuel-hungry California, where the statewide average gasoline price
    passed the $4-a-gallon mark Thursday, a new survey showed that
    motorists could be overpaying by as much as $3.4 million a day during
    the summer months.

    "It’s a significant number, and one that we shouldn’t be paying," said
    Judy Dugan, research director at Santa Monica-based Consumer Watchdog,
    formerly called the Foundation for Taxpayer and Consumer Rights. "With
    every rise in the price of gas, hot fuel becomes a more important
    issue."

    For consumers and companies struggling with their fuel bills, the added insult of a hot-fuel penalty is unwelcome.

    "It irritates me because I don’t think it has to be that way," said Jim
    Aasen, who owns Montrose-based Crestmont Appliance Service. Last year,
    the monthly gas bill from all his house calls jumped to $425, up $100.

    "When that happened… I raised my service call charge by $20," he
    said. Now that $4-a-gallon gas threatens to boost his costs further,
    Aasen said, "I might have to do it again."

    The science behind the hot-fuel controversy isn’t in dispute. The U.S.
    government defines a gallon of gas this way: At 60 degrees, a gallon is
    231 cubic inches. But when fuel is warmer than 60 degrees, the liquid
    expands, yielding less energy per gallon. When it’s colder, the fuel
    contracts.

    Gasoline expands or contracts 1% for every 15-degree change in the
    fuel’s temperature. Diesel volumes change 0.6% per 15-degree change.

    The phenomenon — and the economic effects of it — is so well known
    that U.S. oil companies and distributors track the temperature of the
    fuel they sell one another and adjust the total bill to conform with
    the 60-degree standard.

    Gas stations and truck stops don’t have temperature-compensating
    devices, so the pumps dispense each gallon as if it is flowing at 60
    degrees — and the stations charge customers as if they are getting
    government-standard gallons.

    There is nothing illegal about the practice. It’s been allowed for
    decades by measurement regulators who assumed that retail fuel
    temperatures stayed close to the government standard most of the time,
    and that any losses from hot fuel in
    the summertime would be offset by gains in the winter.

    California’s new study, which sampled fuel temperatures around the
    state during a 12-month period, found that gasoline temperatures were
    almost always well above the 60-degree standard. The year-round average
    temperature was 71.1
    degrees.

    Calculating how much money consumers lose in the process isn’t easy,
    though, because the amount of the overpayment depends on the
    temperature of the fuel and the retail price of gas, and both are in
    constant flux.

    "It’s the equivalent of the grocer taking your meat into the back room
    to weigh it and putting his thumb on the scale," said Dugan of Consumer
    Watchdog. "With gasoline, everybody has their thumb on the scale."

    Consumer groups and trucker organizations — some truckers have sued
    oil companies over the issue — have urged state and federal officials
    to force gas stations to install equipment that would rectify the
    problem. The possibility is being studied in California.

    Sen. Claire McCaskill (D-Mo.) introduced legislation in August that
    would require all new and upgraded retail fuel pumps to be outfitted
    with automatic temperature-compensation equipment.

    In Canada, where cold weather would give consumers the advantage at the
    pump, most fuel retailers were quick to invest voluntarily in the
    devices. And Hawaii requires retail pumps to dispense fuel on the
    assumption that it is 80 degrees instead of the standard 60 degrees.

    A coalition of service-station retailers and truck-stop operators has
    been fighting back, arguing that the equipment is expensive and that
    there is no evidence that consumers are being cheated.

    "If everybody has to put on temperature correction equipment… that
    expense is going to be passed on to the customer in the price of gas,"
    said Jay McKeeman, a vice president at the California Independent Oil
    Marketers Assn., a trade group for gas station owners and others. "What
    we don’t know is whether that cost to the customer will be offset by
    the benefit. In our estimation and evaluation, it won’t."

    The state has approved one temperature-adjusting device for sale in
    California, and measurement rules allow any station to install the
    equipment voluntarily. McKeeman’s group wants to prevent that too.

    In February, his group wrote state measurement officials urging them to
    "immediately adopt emergency regulations" to prohibit any retailer from
    installing the temperature-adjusting devices.
    —————
    Contact the author at: elizabeth.douglass@latimes.com

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