Kucinich says FTC used bad numbers in ‘hot fuel’ equation

| Monday, September 10, 2007

The Federal Trade Commission underestimated the effects of temperature on fuel sold through retail pumps, according to the chairman of a House subcommittee.

Democratic Rep. Dennis Kucinich of Ohio is the chairman of the Subcommittee on Domestic Policy of the U.S. House Committee on Oversight and Government Reform and he has sent a letter to the Federal Trade Commission stating that the agency’s numbers may underestimate the consumer impact of “hot fuel” by more than 12 times.

The letter, dated Sept. 7, came in response to correspondence between FTC Chair Deborah Platt Majoras and Rep. Darrell Issa, R-CA, the ranking Republican on the Domestic Policy Subcommittee.

According to Kucinich, Marjoras and Issa stated in correspondence that thermal expansion of fuel accounts for a volume change of just six tablespoons for every 20-degree fluctuation in temperature –about 0.1 percent.

Kucinich – a 2008 presidential hopeful – said that based on independent research done by the National Institute of Standards and Technology, thermal expansion alters the volume of fuel by 1.38 percent for every 20-degree fluctuation.

“Hot fuel” refers to retail gasoline and diesel sold at temperatures higher than 60 degrees, therefore a temperature of 80 degrees would yield a change of 1.38 percent. Fuel sold at 100 degrees, then, would be expanded by 2.76 percent.

“The erroneous implication is that volume variation caused by hot fuels is less than standard tolerances,” Kucinich wrote.

In a 20-gallon tank, Kucinich said, a 20-degree fluctuation in temperature would cause a volume variation of one-third of a gallon.

“When calculated properly, the national hot fuel premium – the amount consumers pay for an increased volume but not energy content of gasoline caused by temperatures in excess of the industry standard – has been estimated to be about $1.5 billion in the summer of 2007 alone,” Kucinich wrote.

Kucinich called for Federal Trade Commission officials to brief his subcommittee about their method of calculation at a future hearing. That hearing date has not yet been set.

Fuel retailers and oil companies, meanwhile, continue to increase their profits from fuel sales during hot months – something that stats from the National Institute of Standards and Technology show doesn’t even out in the winter.

For years, retailers have either denied hot fuel exists or have refused to implement pump technology that could standardize the way fuel is sold to consumers regardless of temperature.

– By David Tanner, staff writer
david_tanner@landlinemag.com

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