Hot Fuel Costs Consumers Billions
House Panel Takes Second Look at Temperature Compensation. A follow up our previous "Hot Fuel" feature (view)
Ohio Democrat Dennis Kucinich, chairman of the House Oversight and Government Reform Committee, questioned executives from ExxonMobil and Shell Oil last week on the industry’s resistance to installing temperature compensation devices on retail dispensers in the United States.
Kucinich called it a “double standard” that temperature compensation is used at all points of the refining and wholesale fuel process, but not at the retail pump. “In Canada, the oil industry moved quickly to adopt automated temperature compensation at the retail pump,” Kucinich said. “But in the US, where temperatures are often considerably warmer than the industry standard of 60 degrees, the oil industry has resisted equipping gas stations with temperature compensation technology.”
Hugh Cooley, vice president and general manager of Shell Oil’s wholesale division, said consumers are “absolutely not” paying a hot fuel premium. He told the subcommittee there are a number of factors, besides temperature, that determine the energy content of gasoline.
“Consumers are purchasing gasoline dispensed in a uniform measurement and sold in a consistent pricing system that takes into account the same factors in each market, such as supply, distribution logistics, demand, temperature and the like,” Cooley said. “Shell firmly believes that market prices take into account the absence of temperature adjustment.”
Consumers would not realize any pricing benefit and would have the cost of installing temperature-compensation equipment on retail pumps passed on to them, Cooley said. Retailers would have to be willing to sell larger, temperature-adjusted gallons at the same price as they had sold standard gallons for consumers to benefit, and that is unlikely, said Cooley.
Ben Scoraci, retail sales director for ExxonMobil’s marketing company, said his company’s stations adhere to state laws that mandate fuel be measured by volume alone. He said selling temperature-compensated fuel at the retail level would violate current laws and regulations.
What Exactly Is Hot Fuel?
When gasoline gets hot, it expands. But U.S. fuel pumps don’t adjust for the bigger volume, costing American consumers billions. As a liquid, gasoline expands and contracts depending on temperature. At 60-degrees (a standard set nearly a century ago), the 231-cubic-inch American gallon puts out a certain amount of energy. However, that same amount of gas expands to more than 235 cubic inches at 90 degrees. U.S. Dispensing systems, however, are not set to compensate for that difference meaning that consumers get less gas yet pay the same amount at the pump.
