SACRAMENTO, Calif. -- The California attorney general's office has launched an investigation of gas stations and truckstops selling hot (as in temperature) fuel to consumers without making adjustments for changes in fuel volume, reported The Kansas City Star.
Tom Dressler, a spokesperson for Attorney General Bill Lockyer, told the newspaper that his office will investigate whether any state laws or regulations were broken. The attorney general also plans to recommend how the problem can be fixed. The action comes in response to a Star story about how [image-nocss] gasoline and diesel retailers profit from selling fuel that is hotter than the 60-degree standard temperature agreed to by the industry and government regulators nearly a century ago.
Drawing on a fuel-temperature database compiled by a federal agency, and adjusting for state-by-state fuel temperatures and consumption patterns, the newspaper estimated that hot fuel costs U.S. consumers $2.3 billion a year. The financial cost to consumers in California, which uses more gasoline than any other state, was $500 million, said the report.
In Hawaii, the state requires that retailers dispense 234 cubic inches per gallon, rather than the 231 cubic inches per gallon dispensed in the rest of country, to compensate for hot fuel. The state assumes its fuel is sold at an average temperature of 80 degrees, 20 degrees above the standard.
In Texas, fuel tanks average 78 degrees, according to the National Institute of Standards & Technology.
In Canada, where cold fuel once cost retailers money, the industry supported a voluntary program to retrofit pumps to automatically adjust volumes to account for temperature change. Such a technological fix would cost $1.4 billion to $1.9 billion in the United States, the paper estimated.
It's a simple principle. You should get what you pay for, said Dressler, adding that it was most disturbing that the major oil companies and other retailers were nickel-and-diming Californians while posting record profits.
But the American Petroleum Institute (API), which represents the oil industry, said the hot-fuel problem is negligible and not worth fixing, citing the high cost of retrofitting the country's gasoline and diesel pumps. The API said consumers would be confused by fuel dispensers that adjust the volume of fuel pumped for temperature variation, according to the report.
Dressler said the AG rejected the notion that U.S. consumers would get confused by purchasing gasoline adjusted for temperature. Our consumers are just as smart as those north of the border, he said.
Following the publication of the Star report, The Foundation for Taxpayer & Consumer Rights called upon state and federal regulators to adopt new temperature-sensitive gasoline pump technology.
FTCR President Jamie Court sent letters to U.S. Energy Secretary Samuel Bodman, California Governor Arnold Schwarzenegger and Lockyer calling for installation of temperature-sensitive pumps.
"It's outrageous that motorists, who are already paying too much for their gasoline so oil companies can make billions in profits, cannot rely on an honest measurement for every gallon of gasoline they pump," Court wrote. "Every penny matters and oil companies should be accountable for every penny charged. I urge you to immediately embrace a requirement that oil companies update their gasoline pump technology to allot for temperature variation."
Court also asked Schwarzenegger to remove a top California official responsible for defending the oil industry's current technology. Dennis Johannes, assistant director for California's Department of Weights & Measures, told the Star consumers couldn't understand the issue and trying to address it was futile.
"Governor, the average temperature of California gasoline all year long is about 75 degrees, which means that consumers are losing three cents for nearly every gallon they pump and that's how oil companies are making billions," wrote Court. "For Mr. Johannes to dismiss a solution to a $500 million ripoff of motorists in California shows he does not have consumers' interest at heart. You should dismiss him from his post immediately and take steps to force oil companies to adjust their gasoline pump technologies in keeping with Hawaii and Canada. The California economy and California families deserve an honest measurement at the pump for every gallon and a fair price for it as well. Pennies add up for every motorist and oil companies should be accountable for every penny they charge."
Court also pointed out Schwarzenegger's receipt of more than $2 million in oil company contributions. "While you have received more than $2 million in campaign contributions from oil companies, your administration has yet to take a single step to help California motorists who have paid the highest price for gasoline in the nation and use more gasoline than residents of every other state," Court noted. "Frankly, Governor, the requirement for new temperature sensitive pumps in a state like a California is a 'no brainer.' If you have any concern for the impact of high gas prices on the residents of our state, you will move immediately to force oil companies to change their current technology to be temperature-sensitive or, as Hawaii has done, recalibrate gasoline pumps to assume gasoline is stored at higher temperatures."
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.