Truck drivers and motorists in seven states have filed a complaint against seventeen oil companies and gasoline and diesel retailers for overcharging at the pump for fuel heated above the industry standard. It’s said that this so-called “hot fuel” provides less energy than a standard gallon and cheats consumers of more than two billion dollars nationwide. For decades, fuel retailers have been overcharging drivers by selling gasoline or diesel that is warmer than the industry standard of 60 degrees. Like all liquids, the volume of fuel expands and contracts when the temperature changes. Hotter fuel has less energy in each gallon than cooler fuel. Regardless of whether fuel temperature rises due to radiant heat from the sun or the refinery process, the results are the same: consumers pay more for less energy.

Those who buy fuel in bulk, such as our armed forces, have temperature-adjusted purchase agreements with the oil industry. In fact, fuel is adjusted for temperature all along the distribution line except at the end point, when it is delivered to individual consumers. At the retail pumps in this country, motorists never know how much energy they will receive from a gallon of motor fuel. By some estimates, retailers are shortchanging drivers 760 million gallons per year.

The class action lawsuit charges the petroleum retailers with breach of sales contract and consumer fraud and seeks relief for motor fuel consumers in the states of California, Texas, Florida, Arizona, New Jersey, North Carolina and Virginia. It calls for remedies in the form of restitution and the installation of temperature correction equipment for pumps that dispense gasoline and diesel fuel. The seventeen companies charged in the suit are Alon USA, Inc., Ambest, Inc., Chevron USA, Inc., Circle K Corporation, Citgo Petroleum Corporation, ConocoPhilips LLC, Costco Wholesale Corporation, Flying J., Inc., Petro Stopping Centers, L.P., Pilot Travel Centers LLC, Inc., 7-Eleven, Inc., Shell Oil Products Company, LLC, Tesoro Refining and Marketing Company, The Kroger Company, TravelCenters of America, Inc., Valero Marketing and Supply Company and Wal-Mart Stores, Inc.

It seems very clear that hot fuel overcharges add up to huge, ill-gotten windfalls for Big Oil. To add insult to injury, the oil industry also benefits from state and federal tax loopholes related to overheated fuel. Gasoline and diesel fuel is measured and taxed at the time it is bought at wholesale. Instead of going to federal and state governments, any additional amount of taxes paid by motorists at the pump buying hot fuel goes straight into the pockets of the oil companies and retailers. Interestingly, the oil industry’s position on temperature-adjusted motor fuel pumps at the point of retail sale depends on where it is standing on this issue. While it opposes temperature compensation in the United States, it embraces it in Canada, where it stands to lose money from selling “cold fuel” that has more energy than the standard gallon. The industry has voluntarily implemented the use of temperature control equipment at retail pumps in Canada and supported legislation there to make the technology mandatory at the point of sale. Public Citizen President Joan Claybrook had this to say about the lawsuit:

This lawsuit comes at a particularly appropriate time to expose a system that has been quietly picking money from the pockets of citizens throughout the country.

Ultimately, Congress needs to protect U.S. consumers against the industry-wide practice of hot fuel overcharges – but in the absence of government protections, the only solution is for consumers to band together and force a remedy through the legal system.

Source: Public Citizen

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