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Motorists Sue Over 'Hot' Fuel

i_like_spam writes "Motorists in 13 states have filed lawsuits against big oil companies and gas retailers alleging unfair pricing practices related to fuel-pumping temperatures. From an industry standard developed in the 1920's, the price for a gallon of gasoline is based on the density of the fuel at a temperature of 60 degress F. A gallon of gas at higher temperatures is less dense, and therefore contains less energy. The lawsuits claim additional costs of 3 to 9 cents per gallon without temperature adjustments. The fuel industry claims that the costs of installing temerature-adjustment sensors on every pump would be prohibitively high. These sensors are already installed in Canada, however, where the colder temperatures favor consumers."

12 of 572 comments (clear)

  1. Evidence of efficient markets by Hal_Porter · · Score: 5, Interesting

    Look on the bright side - the fact that the US companies do this sort thing to a greater extent than in other countries is evidence that they operate in more competitive and less regulated environment where a few cents is noticed. And while you may pay a few extra cents for you petrol, you probably pay less for other things because of this.

    --
    echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
    1. Re:Evidence of efficient markets by Hal_Porter · · Score: 3, Interesting

      A free, competitive market is of no use to you if you don't compare prices. To compare prices, you need to know the volume of fuel sold as a "gallon".

      Well if they sell it a room temperature then you can still compare prices. The estimates here say that we're talking about a 2% price differential over 20 degrees Celsius. So it doesn't affect price comparisons, even if a gallon in Texas may be 1% less energy than a gallon in Alaska.

      Or, did you really mean to say, that it's great the oil company bothers to steal a penny a gallon from me, it implies that some other kind soul (Walmart ?) cares enough to toss a few cents my way every now and again ?

      Well Walmart wants your business so it pushes down labour costs and passes on some of the savings to you. The oil company isn't stealing money either, they just decided not to fit a sensor which would save you 2% tops, assuming the gas is 20 degrees C hotter, which seems highly implausible. If you're really concerned about it, there are lawyers who will beat up on the gas companies and pass on some of the savings to you. But those lawyers and Walmart and the gas station are only bothering because they operate in a viciously competitive environment.

      If you were in a nice civilised social democratic place like most of Europe, prices in both shops and (particularly) gas stations would be much higher. So my point is that you're better off somewhere where the gas companies pull stuff like this over a couple of percent all things considered, even though that seem a bit counter intuitive.

      --
      echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
  2. Re:Congressional testimony on Hot Fuels by mdsolar · · Score: 4, Interesting

    It is not the average but the variation that is important. For example, temperatures are higher in the summer when prices are also higher. Refiners could arrange things to keep prices more even but if this effect is large enough, this could be an intentional thumb on the scale. I think ethanol, which is added in the summer is a larger effect. It costs less that gas and has less energy density so you have to fill up more often when the prices are higher.
    --
    Get more energy in the summer: http://mdsolar.blogspot.com/2007/01/slashdot-users -selling-solar.html

  3. Re:Congressional testimony on Hot Fuels by goombah99 · · Score: 4, Interesting

    I find myself extremely skeptical. fuel tanks are usualy fairly far underground. buried tanks are going to be fairly near isothermal and the ambient temperature is not going to change the temp very much on it's short trip to the tank.

    If anyone is getting ripped by this, it's the independent fuel stations. There a fuel truck that has been driving for days or dipped out of above-ground storage might indeed be warmer. So the station is buying hot fuel. But the consumer is probably buying fuel much closer to the underground temperature. It would not be hard to fix this since measuring the temperature of the fuel truck would be easy and infrequent.

    Finally, were talking a couple of percent difference in energy per gallon here. Don't people suppose that their cars efficiency might also vary by a several percent with ambient temperature?

    Finally, the station sells gas by the gallon not by the BTU. you are still getting a gallon. If anything you are getting more than a gallon since it's coming out of a cold tank and then expanding in your hot car tank. So actually you owe them more not less.

    --
    Some drink at the fountain of knowledge. Others just gargle.
  4. Re:Common Sense/Observation != Science by NFNNMIDATA · · Score: 4, Interesting

    I think all you need to know about this is they went to the trouble to install them in Canada where the temp favors the consumer. That would seem to indicate the gas company believes in the phenomenon in question.

  5. Re:Congressional testimony on Hot Fuels by Photonic+Shadow · · Score: 5, Interesting

    I would point out that in aviation, especially military, navel, and commercial aviation, you never hear talk of gallons of fuel, but rather pounds, or kilos of fuel. This is precisely because the proper metric for the determination of the energy content of a fuel payload is the mass of the fuel rather than the volume of the fuel.

    determination

  6. Re:Congressional testimony on Hot Fuels by TapeCutter · · Score: 3, Interesting

    "and the gas station will get an ~2.4% rebate for gas delivered at 100F, but still sell it at full price to the customers! That's what's wrong."

    Not if the retailer sells it at 60F, that's the whole point of the wholesalers paying the rebate. The argument would seem to be about the tempateure of the underground storage.

    As another post pointed out: Neglecting the vodka content, if the retailer sells it at 67.4F he will skim ~$0.20 profit for every $50.00 of gas sold. - I'm pretty sure you would loose more than that in vapour expelled from the tank when filling up on a hot day.

    Off course the reasonable answer is that everyone in the chain either does or doesn't get the adjustment, OTOH: "reasonable" and "oil company" are rarely mentioned in the same breath.

    --
    And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
  7. Re:Congressional testimony on Hot Fuels by morgan_greywolf · · Score: 3, Interesting

    I think ethanol, which is added in the summer is a larger effect


    That depends on which state you're in. In the two states that I've lived in where I've owned a vehicle (Michigan and Florida), the content of gasoline is regulated by the state department of agriculture. If it has ethanol in it, the pump has to say it has ethanol in it. This is partly because some types of gasoline engines absolutely cannot have gasoline with any ethanol it because it will cause engine damage. The gas stations I've gotten gas from (primarily Speedway, Mobil, BP, Hess and Circle K) don't change the stickers that list the content on them in the summer months, so I would have to assume that they are not adding ethanol to the gas in the summer, at least if they're complying with state laws.

  8. Re:Go Higher Gas Prices! by stewbacca · · Score: 3, Interesting
    Well, I drive a sports car that gets 18 miles to the gallon, so you have obviously mislabeled me. Perhaps you missed my entire point: quit griping about high gas prices if you drive an irresponsible vehicle, like stupid oversized trucks that serve no purpose. I drive an irresponsible sports car, but at the same time, I don't bitch about prices. Mabye I'm insensitive to the plight of the poor, but if higher toilet prices would cause just 1000 rancher-wives in Texas to stop driving full sized pickups to the grocery store, then I'm all for higher prices on everything. I'd give tax subsidies to poor people who drive sensible cars, and tax the living sh$t out of cars like my own. You see, I'm anti big-truck-for-no-reason, and other than taxing the sh$t out of big trucks, what else can I do?

    I got over myself years ago, but nice try anyway.

  9. Re:Congressional testimony on Hot Fuels by Dare+nMc · · Score: 3, Interesting

    because transporting 30kg of extra fuel around is free

    pretty much (lose more performance, than economy, since rolling resistance isn't changed much, just have to allow the extra momentum to carry you up the hills, avoid using brakes when possible.) But I figure it is our duty as free market consumers to reward stations for being competitive. IE if no one shopped around for the cheaper fuel, then their would be little incentive for their to be low cost stations that reduce their costs, and lower their prices.

    The garmin GPS software on my PDA, downloads gas prices, and gives cheapest prices along my planed route. So I do that before I leave work, on days I need gas. Although on any given week it only saves maybe $2, I figure enough people do this that it keeps the prices down by double that amount.
  10. Re:Congressional testimony on Hot Fuels by C_L_Lk · · Score: 5, Interesting

    This is absolutely correct. I used to own a small convenience store and gas station - independently operated - I could buy my fuel from whatever supplier would deliver to me at the best price. The suppliers were also for the most part independently operated - some would buy fuel from various depots, others were married to specific suppliers, however, they purchased the fuel in large quantities (typically 100,000 L increments) and stored the fuel in underground tanks at their distribution facility.

    When I would call to order 10,000L of fuel each week, they would fill the 2 compartments in the truck to 80% of their capacity (2 x 6000L compartments filled to 80% = 9600 L) and head out on the highway to my location. After an hour in the sun on a hot day driving to my location, the usual delivery quantity that the register on the back of the delivery truck would read after emptying the 2 compartments was around 9750L - I had to pay for 9750L. The same truck on a cold day in November would often deliver me only 9500L - even though at the distribution terminal they had filled the truck to their set 80% - 9600L.

    My tanks were underground and typically a thermometer dip in the fuel showed a temperature around 58F. So when I bought fuel in the summer - I was often cheated of almost 150L of fuel - I would pay for 9750L to put in my tank, and it would cool down and by the time I pumped it for the customers - I only had 9600L available to pump out. My mark-up was 3c/L - so on 10,000 L approx $300. The "missing" 150L cost me about $150. My profit margin was cut in half in the summer. I figure I somewhat made up for it in the colder months - but it would have been nice if the delivery trucks had been temperature compensating.

    I'm out of that business now - $300 a week profit from selling gas just doesn't pay the bills. I'm surprised any small independent gas stations are still in operation.

  11. Re:Congressional testimony on Hot Fuels by AndersOSU · · Score: 3, Interesting

    In some intro engineering class, the professor asked a question to get us to think about the implications of selecting a unit system. The question was: "Crude and Gasoline are sold on a volume bases (gallon/liter/barrel). If gasoline is refined in Louisiana, and shipped to Michigan does who pays for the missing gasoline (and what are they buying)? Is the sale completed on an "as delivered basis", or an "as shipped" basis?

    Of course the answer is that the consumer pays regardless, but it raises some interesting accounting issues...