Operations

Pump Decals Tell Consumers they are Being Overcharged for Gas

LCT Staff
Posted on July 11, 2007

SANTA MONICA, CALIF. — Dozens of Shell stations and others supplied by refiner Tesoro will feature warning decals on gas station pumps notifying consumers that they may not get all of the energy they are paying for in a gallon of gasoline. Higher temperatures cause fuel to expand, therefore carrying less energy per gallon that gasoline in lower temperatures.

"The warning labels are acknowledgement of this long-time oil industry rip-off of motorists just as they begin their holiday trips," said Judy Dugan, research director of OilWatchdog.org and The Foundation for Taxpayer and Consumer Rights (FTCR). "More consumers will understand what's causing their summer drop-off in gas mileage and be furious. Tesoro would be better off if it went ahead and sold its gasoline fairly."

The organizations believe that consumers should be compensated instead of simply being made aware of the change in the fuel at hotter temps. FTCR said lawmakers should move quickly to require that gasoline sales compensate for higher temperatures at the pump.

The report appears in the Oil Express, an oil industry publication. The warning decals come in response to lawsuits charging motorists are deceived by "hot fuel" sales. Gasoline is sold and taxed as though its temperature was 60 degrees. In California and dozens of other states, gasoline is much hotter when sold, so it expands and provides a few cents' less energy per gallon.

Tesoro has some stations of its own, plus the recently acquired "USA" truck stops and numerous southern California Shell stations that came with the company’s purchase of a large Shell refinery.

FTCR said the labels, despite their vagueness, will spur motorists' awareness and demands for fair pricing. However, the Oil Express report says no other chains have yet indicated they'll follow suit. An attorney for distributors and retailers argues that it is illegal to sell temperature-adjusted gasoline. That is certainly not true in California, says FTCR, but the legislature should make it required as well as legal. "The loss is perhaps 50 cents per hot tank-full for individual motorists, but the collective loss is estimated, according to federal data, at about $450 million a year in California," said Dugan. "Sales must be honest to be fair.”

Source: Foundation for Taxpayer and Consumer Rights

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