FTCR Calls On Attorney General, Boxer To Force Sale Of Temperature-Adjusted Gasoline Pump In California

Santa Monica, CA — California regulators have certified a temperature-adjusted gasoline pump to prevent “hot fuel” from shortchanging motorists, but the oil industry has pressured the pump’s manufacturer to refuse to sell the pump in California.

In response to the revelation in the Kansas City Star Sunday, the Foundation for Taxpayer and Consumer Rights called on California Attorney General Jerry Brown to launch an investigation into whether the oil industry has unfairly used its market power to deny motorists access to an honest accounting for each gallon of gasoline. In addition, FTCR urged U.S. Senator Barbara Boxer to hold hearings and force oil companies to withdraw their pressure on Gilbarco Vedeer-Root, the temperature-adjusted pump manufacturer, which has decided not to sell its pump in California.

“Gilbarco’s decision not to sell its product could only be in its own economic interest if oil companies threatened to boycott its other products, non-temperature adjusted pumps,” FTCR President Jamie Court wrote in letters to Attorney General Brown and to Senator Boxer, who the consumer group worked closely with to prevent Shell Oil from closing its Bakersfield refinery. “Now that regulators have done their job and certified the technology to cool down the hot fuel market, the oil companies should not be allowed to pressure manufacturers to deny motorists an honest measure of the gasoline they pay for. If oil companies are allowed to control every aspect of the gasoline market, from the oil well to the technology that accounts for whether motorists truly get a gallon of gasoline dispensed at the pump, then there is no clearer definition of a vertical monopoly.”

When the temperature of gasoline rises above 60 degrees, gasoline expands but California pumps don’t account for the bigger volume and consumers receive less gasoline than they should. The technology to adjust for temperature has already been installed in Canada where it benefits oil companies, but domestic oil companies have resisted because the practice is so profitable, particularly in sun-belt states. Hawaii is the only state to adjust its pumps for hotter gas.

In August, FTCR called upon state and federal regulators to adopt new temperature-sensitive gasoline pump technology in response to an initial investigation by the Kansas City Star (Read the letter here.) Reporter Steve Everly found fuel pumps that do not adjust for temperature cost Californians at least 3 cents for every gallon in warmer weather, approximately $500 million in industry profits per year, and overcharge Americans more than $2.3 billion annually. California’s weights and measures officials have now cleared the way for the use of temperature adjusted gasoline pumps, but Gilbarco’s decision not to sell the pump makes the officials’ decision moot.

Taxes paid per gallon by consumers are also not all passed through to the government because of the hot fuel problem. As a result, the IRS, the state, and the consumer are being shortchanged.

“Motorists and taxpayers have been ripped off by hot fuel for too long,” said Court. “Would we let grocery stores rig produce scales once weights and measures experts acknowledged the problem? California is the test case for the temperature-adjusted pump in America. We must not allow one powerful industry to foil a fair and honest accounting for American motorists.”

Read the earlier Kansas City Star stories:

Hot Fuel For You, Cold Cash For Big Oil

Hot Fuel Triggers Investigation

Highway Funding Shortchanged, Loophole Enhances “Hot Fuel” Profits

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