The Kansas City Star reports that Americans may well have a way out of the $2.3 billion they overpay at the pump each year because of the "hot fuel" scam.
In a nut shell, when the temperature of gasoline rises above 60 degrees, gasoline expands and delivers less energy per gallon. Since American gas pumps don’t account for the bigger volume, consumers receive less gasoline than they should.
The technology to adjust for temperature has already been installed in Canada where it benefits oil companies, but domestic oil companies have resisted because the practice is so profitable, particularly in sun-belt states. Hawaii is the only state to adjust its pumps for hotter gas.
Until now. The Star reports California regulators have finally certified a temperature-adjusted gasoline pump to prevent "hot fuel" from shortchanging motorists, but the oil industry has pressured the pump’s manufacturer to refuse to sell the pump in California. Gilbarco Vedeer-Root, the temperature-adjusted pump manufacturer, which has decided not to sell its pump in California, stands to lose big sales on its other traditional pumps if it bucks the industry. Sources say the industry pushed back on the company.
If there’s a clearer case of an anti-trust investigation, I have not seen it. Would we let grocery stores rig produce scales once weights and measures experts acknowledged the problem? And wouldn’t at least one grocery story step up and say it would measure produce appropriately?
Now that regulators have done their job and certified the technology to cool down the hot fuel market, the oil companies should not be allowed to pressure manufacturers to deny motorists an honest measure of the gasoline they pay for. If oil companies are allowed to control every aspect of the gasoline market, from the oil well to the technology that accounts for whether motorists truly get a gallon of gasoline dispensed at the pump, then there is no clearer definition of a vertical monopoly. All the major oil companies see big dividends from the hot fuel market, but the West’s biggest refiner, Chevron is at the forefront of this fight, and its practices will be under particular scrutiny.
Time for the new Congress to hit the gas peddle and run over the hot fuel market.
If it needs an incentive, consider this one. It’s not just motorists who are being cheated either, but American taxpayers too. Gasoline retailers buy temperature-adjusted gallons wholesale and pay taxes on that volume. They then sell more gallons of hot fuel retail without temperature adjustment, so they collect more taxes on more gallons. And they pocket the difference, shortchanging federal highway funding. Oil companies use the hot fuel dividend for station owners as a way to drive up the price per gallon they charge the retailers.
Time to turn up the lights, hold hearings, swear in the oil executives. The CEOs have been traveling the nation to claim they suddenly care about their role in causing global warming. Well, hot fuel is yet another way the companies warming our planet benefit from the heat.