Group Demands the Next Step: Fix the Problem
Santa Monica, CA — ExxonMobil will put decals on its gasoline pumps in California and Arizona acknowledging that “hot fuel” may not deliver the full value of a gallon of gasoline, according to a report in the industry publication Oil Express. Exxon took the step to protect itself from class-action lawsuits that accuse marketers of defrauding drivers with “hot fuel,” said the Foundation for Taxpayer and Consumer Rights.
FTCR said ExxonMobil, the world’s largest oil company, should have announced plans to fix the problem, which would have gained its brand market share and consumer confidence. Instead, said FTCR, the company is just fending off lawsuits and making drivers angrier.
“A cheap decal is like a tobacco pack warning,” said Judy Dugan, research director of OilWatchdog.org and FTCR. “It may be Teflon against lawsuits, but it offers no protection to consumers. The cost of each decal may be less than the 50 cents a fill-up that consumers are paying for ‘ghost gas,’ the lost energy of fuel sold at high temperatures.”
The Oil Express report says the wording of the decal will be:
“This device dispenses motor fuel by volume measured in gallons. It does not adjust the volume for variations in the temperature of the fuel. The temperature of motor fuel affects the energy content of each gallon dispensed.”
“The loss is perhaps 50 cents per hot full tank for individual motorists, and the collective loss to motorists in California alone is estimated at about $450 million a year in California,” said Dugan. “ExxonMobil can’t evade its responsibility to sell gasoline fairly and honesty with a decal essentially saying ‘Yeah, we rip you off and what are you going to do about it.’ ”
ExxonMobil’s action follows a similar decal warning ordered by refiner Tesoro at its California stations, including the small USA Petroleum chain and more than 250 Shell stations recently acquired by Tesoro. At the time, other companies denied that they would follow suit, said FTCR.
U.S. manufacturer Gilbarco already makes a gasoline pump nozzle that measures the temperature of gasoline as it leaves the pump, and it is widely used in Canada (where sellers benefit from lower gasoline temperatures). The head of the California Weights and Measures board has stated that the pump may be sold and used in California, but Gilbarco has declined to offer it for sale.
Gasoline is adjusted for temperature variations from the national standard of 60 degrees when it is sold by the refinery to distributors, and when it is sold again to retailers. At each stage, the buyer receives extra gasoline to make up for expansion and energy loss if the fuel is over 60 degrees. However, the fuel is sold without any temperature adjustment to motorists, causing an annual loss of $2.3 billion to drivers nationally. In California, the statewide average year-round temperature of gasoline is over 74 degrees, according to a federal study.
“Sales must be honest to be fair. Yet the industry from the refinery level on down cheats both motorists and taxpayers by pretending that fuel is 60 degrees in order to fatten their own profits,” said Dugan.
The Oil Express article said ExxonMobil would require the decal at its company-owned and franchised stations, and would “encourage” others that sell the ExxonMobil brand to display the decal.
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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.