Oil Watchdog

Chicago, IL — Motorists setting out for the Labor Day holiday
will lose from a few pennies to a dime per gallon on each fill-up, and
lobbyists for the refining and fuel distribution industries are working
to keep it that way, said OilWatchdog.Org. Regulators meeting today on
ways to sell gasoline by energy content rather than by volume found
stiff opposition from industry lobbyists and trade groups.

Consumers lose out on every gallon of gasoline that is sold
above 60 degrees, said OilWatchdog, a nonprofit consumer-oriented oil
industry critic. To push the oil industry and regulators, OilWatchdog
is offering its own free "Hot Fuel Warning" stickers to consumers at
the web site promoting U.S. Senate legislation to force installation of
temperature-adjusting gasoline pumps, which are already in place in
Canada. The consumer group stickers also respond to vague, mealymouthed
"fuel temperature variation" stickers that ExxonMobil is putting on
some of its pumps. The oil company stickers are widely seen as a way of
fending off lawsuits rather than fixing the problem. Click here to see both stickers and learn more about hot fuel here.

"The oil industry puts a thumb on the scale all through the
summer driving season, and year-round in warmer Southern and Western
states," said Judy Dugan, a founder of OilWatchdog.org. "This
hot-weather ripoff has gone on for decades simply because that’s the
way the industry wants it, and the clubby National Council on Weights
and Measures had no reason act because consumers were unaware."

The NCWM, whose members include state regulators and
representatives of regulated industries, usually operates far out of
the public eye. Increasing interest in the "hot fuel issue" and a
lawsuit by long-haul truckers whose livelihoods are harmed by it, have
put an uncomfortable spotlight on the quasi-government body. A special
committee of the NCWM is meeting in to examine models for selling
temperature-compensated gas to motorists, just as it is sold in
wholesale transactions.

NCWM panelists and equipment experts Monday and Tuesday made it clear that:

– Technology is readily available to measure gasoline
temperature at the pump and adjust its volume according to temperature
as it goes into the tanks;

– Setting new national standards would likely improve the accuracy of the whole gasoline sales system;

– Temperature-measuring nozzles are used across Canada with no
difficulty in either measuring the gasoline or regulating the
equipment;

– The cost to distributors and retailers would be far less
than oil company lobbyists have insisted, about $1,400 per pump. Oil
industry spokesmen have quoted exaggerated prices of over $4,000 per
pump. If instituted over a moderate number of years, the cost of the
shift would be mostly absorbed in regular equipment modernizations;

– Perhaps most important, if the NCWM fails to act, Congress,
state legislators and individual state regulators are likely to take
matters into their own hands. This could call into question the
effectiveness of the NCWM itself. The group establishes standards for
everything from supermarket scales to the size of a bushel of corn. Its
"recommendations" are tantamount to federal law.

"’Hot fuel’ is a basic fairness issue," said Dugan. "What’s
good for the wholesaler and retailer is good for the customer.
Retailers shouldn’t have to eke out profit by selling "extra" gallons
that are pure profit, and on which taxes are often not paid. The system
is overcomplicated, opaque and not deserving of trust."

Gasoline, from the refinery to the minivan’s hungry tank,
should be sold by the same kind of measurement. Either adjust it for
temperature at all points or don’t do it at all, said OilWatchdog.

Fuel, like any liquid, expands as it warms up. The oil
industry measures gasoline at a 60-degree standard and adds extra
volume to wholesale purchases when the gasoline goes above that
temperature. Retailers also benefit from temperature compensation, but
consumers get no such break. They buy a gallon fixed by volume, so it
has less energy and provides fewer miles per gallon when it is hot. See
www.OilWatchdog.org for more background and information on the hot fuel issue.

Summer gasoline temperatures routinely are above 80 degrees and
can reach over 100 degrees, costing motorists up to a dime a gallon in
lost energy. Nationally, that adds up to a loss of $2.3 billion a year.

Even in colder states, where drivers would get little or no
direct benefit from temperature compensation, such a sales system would
be more transparent and easier to evaluate for profiteering at any
level, from the refinery on down.

"Fairness and transparency are values that make the change
worthwhile, no matter how much or little benefit an individual state or
driver would see," said Dugan.

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OilWatchdog.org is a
project of the Foundation for Taxpayer and Consumer Rights, a
nonprofit, nonpartisan consumer watchdog organization. Its website is www.ConsumerWatchdog.org.