Oil Watchdog

Listen to the audio of the story here.

MADELEINE BRAND, Host: From NPR News, this is DAY TO DAY. Get ready
for a gasoline supply crunch over the next five years; that today from
an international energy agency report. But when you’re filling up this
summer, you might be paying more for an entirely different reason, and
it has to do with the way gas expands in hot weather.

MARKETPLACE’S Sam Eaton joins us to explain. And Sam, tell us what this means, expanding gas.

SAM EATON: Well, it basically comes down to simple physics,
Madeleine. As the summer temperatures rise, gasoline expands because of
the higher temperatures. Now, that means the amount of energy you get
for a gallon of gas that’s hot is a lot less than when that gallon is
cold. The problem is, retail gas stations don’t account for that
difference in temperature. They sell it according to the national
measurement standard, which it seems gasoline has an average
temperature of about 60 degrees. And it pretty much does until the
delivery truck pumps that gas into tanks, sitting under baking asphalt
at the gas station. And once it’s there, it can get up to about 98
degrees before it goes into your car, according to one study.

I talked to Judy Dugan with the Foundation for Taxpayer and
Consumer Rights. And she says that 60-degree benchmark for measuring
gas in the marketplace is the equivalent of putting a thumb on the
scale.

Ms. JUDY DUGAN (Research Director, Foundation for Taxpayer and
Consumer Rights): This is what’s caused drivers for years to say, gosh,
I get worse gas mileage in the summer, because it’s gasoline that’s
being sold in a way that fundamentally works against the consumer and
costs you about 50 cents a tankful.

EATON: Now, you add up those extra costs over the entire
summer, she says, and US Drivers are paying more than $1.5 billion for
gas they’re basically not getting.

BRAND: Now, consumer groups like hers have filed dozens of
lawsuits against oil companies and gas retailers, I understand. Do they
have a case?

EATON: Well, it — Madeleine, it depends on which side you’re
talking to, of course. The consumers’ groups and several Democrats in
Congress say it amounts to deception. They claim fuel distributors are
unjustly enriching themselves on this phenomenon.

The solution, they believe, is to mandate the use of equipment that compensates for the temperature swings at the pump.

Now, Canada has been doing this for some time, but it’s easier
to mandate there because gas is usually colder than 60 degrees, which
means gas stations are actually losing money.

But here in the US, gas retailers argue that the upgrades would
be too costly, anywhere from $1500 to $3800 a pump. They say that’s
enough to put many independent gas stations out of business. They also
say more research is needed, claiming the estimates of over-charging
are the result of guesswork.

BRAND: What will happen? Will it get to court?

EATON: Well, this is where Congress comes in, actually. And this
could happen before it goes to court. It’s putting pressure on a group
called the National Conference on Weights and Measures, which gives
final rule on how things are weighed and measured in the marketplace.
And this group begins its annual meeting tomorrow in Salt Lake City.
The question is whether the conference will cave to pressure from
Congress, or whether the change will come from the dozens of consumer
lawsuits we were mentioning.

BRAND: Thanks a lot, Sam. That’s Sam Eaton of Public Radio’s
daily business show, MARKETPLACE, produced by American Public media.