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Three-Penny Operatics | Oil Watchdog

Press Release

Three-Penny Operatics


Wed, Mar 12, 2008 at 3:08 pm

    Three-Penny Operatics

    3-12-08 by dugan



    When oil marketing lobbyists argue that motorists don’t need or deserve a fix for the "hot fuel" ripoff, their fallback is that a consumer loss of a few cents a gallon just isn’t worth fixing. For Californians, for instance, the average loss is now 3.5 cents a gallon, at the average state fuel temperature of nearly 75 degrees. It turns out that’s more than enough to matter:

     A recent Shell credit card promotion in Idaho, found that delivering an instant 3-cents-a-gallon rebate for users of a Shell credit card boosted both sales and customer loyalty. According to a report in the industry publication Oil Express, stations taking part in the pilot program doubled their customer applications for credit cards, sold 10% more gasoline and increased their share of customers loyal to the brand. Three cents a gallon is apparently worth plenty to motorists.

    It’s all the more reason for a first brave retail chain to get in front of the curve by selling and advertising "Fair Fuel." When fuel is sold fairly, meaning adjusted for temperature variation (as it is to wholesalers and most retailers), the buyer gets a little extra fuel to account for expansion loss at any temperature above 60 degrees. OilWatchdog heard that Costco was considering such a move and wrote a letter to Costco’s chairman encouraging the move. We didn’t hear back, and later found that the move was put off until California settles what it will or will not require to fix "hot fuel" in the state. Too bad. Selling temperature-adjusted fuel is entirely legal in the state now, and a successful "Fair Fuel" fact on the ground would have made the state’s decision simpler.   

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