Federal District Judge in Kansas City Refuses to Dismiss Suit Against Petroleum Marketers Alleging Deceptive Sale of Gasoline, Diesel Fuel
Santa Monica, CA — The sale of "hot fuel" will bring a long,
uncomfortable summer to petroleum marketers, refiners and oil companies
with a federal judge’s across-the-board decision to let a lawsuit
against the practice go forward, said the Foundation for Taxpayer and
Consumer Rights (FTCR) and its OilWatchdog project.
FTCR said the lawsuit, covering a majority of states, should raise
motorists’ awareness that they lose up to a dime a gallon from the sale
of "hot fuel," especially in the South and Southwest.
"Forcing motorists to buy ‘hot fuel’ is yet another way oil
companies cheat us. Drivers’ losses boost the bottom line of the oil
business, from the oil company down to the retail level," said Judy
Dugan, research director of Oilwatchdog.org and FTCR. "A major point of
this lawsuit is that drivers have no way of telling the temperature of
the fuel they buy, and thus have no way to determine its true value."
The ‘hot fuel’ scam occurs because gasoline expands as it warms
up, for reasons including the refining process, air temperature and
solar heating. The expansion means that a measured gallon loses energy
as it warms, providing fewer miles per gallon. When gasoline is sold at
the wholesale level, it is adjusted for temperature variation from the
national standard of 60 degrees. Most retailers also get extra gallons
to compensate for temperature expansion. But consumers can buy fuel
only by a measured gallon, no matter what its energy content, with
warmer gas yielding less energy per gallon. It is notable that in
Canada oil companies adjust retail gasoline sales for temperature,
because colder than average temperatures there would otherwise give
consumers an advantage.
In California and Arizona, ExxonMobil has put stickers on its
pumps about fuel energy being "affected by temperature" as a tactic to
fend off the class action lawsuits against hot fuel sales. (Click here for more information on this story.)
Independent truckers, represented by the Owner Operator
Independent Drivers Association (OOIDA), based in Missouri, say they
lose hundreds of dollars a year from hot fuel. The truckers’ group
noted that the lawsuit is far from finished but relished the fight.
"America’s truckers are closely watching the progress of this
case. They want, and deserve to get the same miles per gallon from
every fill-up. Especially since they are having to buy an extra 200
gallons, or so, every year due to hot fuel," said John Siebert of the
truckers’ association. "Having jumped this ‘motion to dismiss’ hurdle,
the case is well into the middle of the beginning phase. The judge has
asked the attorneys for their plans for the discovery portion of the
proceedings. For the plaintiffs, this is not such a hard problem: US
fuel consumers found out how retail fuel is really sold, and did so
recently. For the petroleum retail defendants, it’s going to be a
little harder to explain: they’ve known the impact of temperature on
fuel volume since the 1920’s, yet managed to keep it very quiet until
now. As Mark Twain used to say, "The doors will open at 7:00 o’clock…
the trouble begins at 8:00.¿
Attorney George Zelcs of Chicago, IL, who originally brought
the case for motorists, also praised the breadth of the decision: "The
oil industry defendants represented to the Court that they had a silver
bullet that would end the case and result in the dismissal of all of
the consumers claims. Their aim was not true."
The decision by District Court Judge Kathryn H. Vratil moves the case to the discovery stage, the "who knew what, when" stage.
"Today’s legal victory raises the pressure on regulators and
lawmakers to fix the hot fuel ripoff. It is even more important to
motorists with crude oil over $100 a barrel and gasoline prices rising
to match," said Dugan of OilWatchdog.org.
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