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Hot Fuel Fix Gets Pole-Axed | Oil Watchdog

Press Release

Hot Fuel Fix Gets Pole-Axed


Tue, Jan 29, 2008 at 2:59 pm

    Hot Fuel Fix Gets Pole-Axed

    1-29-08 by dugan

    (Albuquerque, NM)–I thought I was in the chambers of a Chicago alderman watching a deal go down, not in a sober meeting of the National Conference on Weights and Measures. A key committee that was expected to provide a lively showdown on fixing the hot fuel ripoff of motorists began and immediately ended today with a pre-decided vote to disappear the issue for at least another year.  The way the vote was handled, it effectively forbids any action at this summer’s meeting of the National Conference on Weights and Measures–even if regulators in warm states, who are begging for a regulatory framework, want to bring the issue to a vote.

    The chairwoman of the key Laws and Regulations committee is an Ohio regulator who has long opposed the consumer side on the hot fuel issue. She ran the momentary meeting like a veteran political operator: Smile, make a show of letting a few committee members make comments, and hit the gavel.

    A painstaking, years-long effort to design a regulatory scheme for state and national use in permitting the sale of gasoline that is compensated for temperature variation went down the tubes.

    I talked with a veteran of these NCWM meetings who was equally flabbergasted at the outcome. He could vaguely remember one other instance of this kind of collapse to industry: In the 1970s, the weights and measures group took up the hot fuel issue and then dropped it like a hot rock in the face of industry pressure.

    The chairwoman, Vicky Dempsey, even whipped out a piece of paper toting up how the industry lobbyists and their friends in the regulatory group seemed to greatly outnumber the consumers who spoke in the previous day’s discussion. She seemed to be implying that those who can afford to send the most lobbyists win the game. In a way, it’s reminiscent of the California Legislature.

    I won’t get into the longer story of the hot fuel ripoff, except to say that consumers lose up to a dime a gallon on those $3.00 gallons when the fuel is sold above a "reference temperature" of 60 degrees. California gasoline, for instance, averages 75 degrees year-round. That means the gasoline has expanded, offering less energy and lower mileage. Refiners sell gasoline to wholesalers with a temperature adjustment, i.e. with extra gasoline to make up for the expansion. Retailers usually get it with the same temperature adjustment. Consumers don’t, and an industry that makes money off the arrangement wants to keep it that way.

    Since motorists have no way to tell the temperature of the gasoline they buy, they have no way to compare the value of gasoline at different stations, even in the same neighborhood. The temperature can be 10 degrees different across the street.

    The game now shifts to California, where a couple of county weights and measures officials say they know of station operators who are planning to open stations that do offer gasoline that is adjusted for temperature. They wouldn’t say who, or where. But when and if these stations open it will force the state to come up with its own regulation for the equipment that adjusts gasoline volume for temperature, and for how it will be operated. (For instance, the regulators want to make sure that once the temperature compensator is turned on, it can’t be turned off at will. Otherwise, a gas station owner could turn it on when gasoline is delivered at below 60 degrees, and off when it’s hotter.). As with clean air, California will have to go first.

    The National Conference on Weights and Measures is an odd bird of a regulator. Its voting membership is state regulators, but industry lobbyists are allowed as nonvoting members. They mingle at every meeting and the lobbyists usually provide the drinks and entertainment. When it comes to making hard decisions about fairness to consumers, there’s a long history of clubbiness to overcome.

    We hope that Congress will take a hard look at this regulatory scheme and at least provide strong oversight of a system that was broke today, and needs fixing.





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