Bill By Sen. McCaskill Requires Honest Compensation for Gasoline Energy Loss at High Temperatures
Santa Monica, CA — With the “hot fuel” ripoff of drivers at its summer peak, Senator Claire McCaskill of Missouri today introduced a bill to require a fair gallon’s worth of energy at the gasoline pump. This Senate action and separate House hearings will also ignite discussion of wider oil industry practices, said the Foundation for Taxpayer and Consumer Rights.
“This bill opens a Pandora’s Box for the refining industry,” said Jamie Court, president of FTCR and a founder of its OilWatchdog.org project. “The Congressional debate should lead to examination of not just the sale of ‘hot fuel‘ but broader investigation of major oil companies’ fuel pricing and sales practices. It’s now time for Congress and presidential candidates to examine the black box of gasoline pricing and to make a more fair and honest system for consumers.”
Motorists increasingly understand that they lose up to several cents per gallon on fuel that expands at temperatures above the “industry standard” of 60 dedgrees, said FTCR. The refining and marketing arms of oil companies have refused to correct this by adjusting retail sales for temperature variation, even as their profits on gasoline sales have soared to record heights in price spikes during the last two years.
“The combination of a ripoff at the pump and record profits on the refining of gasoline raises broader questions about the refining industry,” said Judy Dugan, research director of FTCR and OilWatchdog.org. “Between this Senate bill and separate hearings in the House, consumers can now expect some answers.”
Gasoline additives such as ethanol also expand when heated, both by the refining process and as a result of hot weather. Temperature measurement at the pump would compensate for expansion of such additives as well as the gasoline and diesel being dispensed.
Data from a federal study released in 2004 found an average national fuel temperature of 64.7 degrees. At current prices, the loss to motorists nationally from “hot fuel” is $2.3 billion. In California alone, with a statewide year-round average fuel temperature of nearly 75 degrees, the loss is $450 million to $500 million.
Most wholesale gasoline transactions are adjusted for fuel temperature, with more gallons delivered for warmer fuel, said FTCR. The U.S. military also demands temperature compensation for the fuel it buys, so it is primarily drivers who pay a penalty for hot fuel.
Voters for a federal advisory group, the National Council on Weights and Measures, approved temperature compensation for retail gasoline by a two-thirds margin this year, but the measure failed on a technicality.
“The responsibility for making the sale of gasoline honest is now back to Congress,” said Dugan. “The oil industry, from Exxon‘s headquarters to the corner retailer, will pressure lawmakers to bury the issue, but voters have the right to expect passage of this bill, the FAIR Fuel Act.”
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The Foundation for Taxpayer and Consumer Rights (FTCR) is California’s leading nonpartisan consumer advocacy organization. For more information, visit us on the web at: www.ConsumerWatchdog.org and www.OilWatchdog.org.