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National ‘Hot Fuel’ Suit Update | Oil Watchdog

Press Release

National ‘Hot Fuel’ Suit Update

CONTACT: Judy Dugan, 213-280-0175 (cell); Jamie Court, 310-392-0522, ext. 327; or John Siebert of OOIDA at 816-229-5791, ext. 1156

Thu, Feb 21, 2008 at 3:09 pm

    National ‘Hot Fuel’ Suit Update

    Consumer Victory as National ‘Hot Fuel’ Lawsuit Moves Forward on All Counts

    Federal District Judge in Kansas City
    Refuses to Dismiss Suit Against Petroleum Marketers Alleging Deceptive
    Sale of Gasoline, Diesel Fuel

    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.”

    Click here to read the Court Order.

    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.

    Click here for more background and science on hot fuel.

    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 –

    For more information, go to: www.OilWatchdog.org and www.ConsumerWatchdog.org

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