When gasoline is hot at pumps, consumers lose in pocketbooks

Sunday, August 27, 2006 Gas is often sold much hotter than a government standard of 60 degrees. MCCLATCHY NEWSPAPERS SUFFOLK, Va. — Lesley Duke's mood darkens with every drop of diesel that flows into his 2005 Freightliner big rig. The 52-year-old independent trucker, known as Lucky, from Hertford, N.C., has just dropped off a load of potatoes and now is topping off his tank on a sweltering summer day. He whips out a thermometer and takes the temperature of the $2.80-per-gallon fuel gushing into his truck's tanks. The thermometer hits 80. Then 90. Finally, it stops at 93 degrees Fahrenheit. "Hot" fuel is costing him the price of a good lunch today, Duke reckons, and as much as $700 a year. It gnaws at him. Duke, you see, is one of the few Americans who realize that fuel is often sold at temperatures much hotter than the government standard of 60 degrees. It's a standard agreed to nearly a century ago by the industry and regulators, but virtually unknown to the average consumer. But you should understand it too — because collectively it's costing us billions of dollars a year. An investigation by The Kansas City Star has found that at current prices U.S. consumers are spending about $2.3 billion more for gasoline and diesel this year than they otherwise would if fuel pumps were adjusted to account for expansion of hot fuel. The process It works this way: As a liquid, gasoline expands and contracts depending on temperature. At the 60-degree standard, the 231-cubic-inch American gallon puts out a certain amount of energy. But that same amount of gas expands to more than 235 cubic inches at 90 degrees, even though consumers still only get 231 cubic inches at the pump. Put simply, every degree over the 60-degree standard diminishes the energy a 231-cubic-inch gallon delivers to the nation's fleet of cars, trucks, boats, buses and heavy equipment — and forces drivers to consume more and pay more for fuel. It is basic physics that, depending on the temperature, can amount to just a few cents per gallon. But it adds up to big money — coming straight out of consumers' pockets and going right to the bottom line of major oil companies and other fuel retailers in the energy pipeline. Moreover, it's perfectly legal, because even though your local filling station measures out your gas as if it were stored at 60 degrees, no law requires retailers to adjust the pump to reflect the expansion of hot fuel. In other words, no law ensures you get what you pay for. For Duke, a former Boy Scout, selling hot fuel is a lie. He recites the Scout laws and lingers on trustworthy. He thinks retailers should adjust for temperature changes or offer customers a refund. He complains about the hot fuel to the truck stop's cashier while handing her his credit card. "You know what that means, don't you?" he says, grousing about the money he is losing. The cashier eyes the card. "Debit or credit?" she responds. Can it be changed? While the problem may be costly to consumers, The Star's examination reveals that it is eminently fixable. The technology exists to retrofit the nation's filling stations to adjust the amount of fuel pumped to reflect changes in fuel temperatures. Even so, Big Oil has argued successfully for decades that it would cost too much to retrofit the nation's fuel pumps, particularly for independent retailers that now sell the majority of the nation's fuel. The industry also argues that consumers simply wouldn't understand fuel pumps that adjust for temperature change. "The consumer doesn't necessarily want to be confused," contends Prentiss Searles, a senior associate for marketing issues at the American Petroleum Institute (API), a Washington, D.C.-based group that represents the industry. "They're thinking, 'I just want a gallon.'" Most major oil companies either declined to comment on the hot fuel issue in the United States, or referred inquiries to the API. However, Anne Peebles, a spokeswoman for Shell Oil Co., said in a statement that the value of automatic temperature correction "may be limited. ... Temperature correction is not something one company can do on its own, it would have to be [a] regulatory requirement that puts all facilities on the same page." In Canada While the industry generally shies away from discussing the idea in this country, it has embraced temperature adjustment in Canada. The reason is simple. While hot fuel makes more money for the industry in the United States, cold fuel once cost the industry money in Canada. The industry put a stop to its Canadian cold-fuel problem beginning in 1990. That's when a Canadian law supported by oil companies and other gasoline marketers went into effect that permitted retailers to temperature-adjust on a voluntary basis. Supporters said the change, which meant Canadian consumers would stop catching a break on cold fuel, brought fairness to the marketplace. Hans Kraus, who owned a company in Canada that supplied equipment to the petroleum industry, helped push the change. Kraus had produced a retrofit kit allowing temperature compensation at existing pumps, and he needed to market his gizmo. So he prepared a study showing that temperature compensation would make the industry money in Canada. The industry bought his pitch and pushed for a change in Canadian law. Today, sales material used by Kraus Global Products in Canada asserts that using fuel dispensers that don't adjust for temperature is an "inherently inaccurate" way to sell fuel.