Commission says fixing ‘hot fuel’ would drive up fuel prices

| Monday, March 16, 2009

The California Energy Commission says forcing retailers to install temperature-compensation devices on fuel pumps would drive up the price.

Officials with the Owner-Operator Independent Drivers Association challenge that claim, saying a one-time investment by fuel companies is part of doing business and would save consumers money in the long run.

During a business meeting Wednesday, March 11, the California Energy Commission recommended against forcing retailers to implement automatic temperature compensation, or ATC, at the pump.

Retail fuel is currently sold as a 231-cubic-inch gallon and does not take temperature into account. Elementary physics shows that all liquids expand and contract with temperature changes.

State and federal law does not require fuel retailers to compensate for temperature, but consumer groups and some lawmakers are trying to change that.

Directed by state law AB868, the California Energy Commission studied fuel temperature and evaluated the cost of implementing ATC at retail pumps.

“If retail station owners and operators continue (are) to grow and remain profitable, then retail station owners will most likely raise their fuel prices to compensate for selling fewer ‘gallons,’” commissioners wrote in the report.

“If this is the case, then expected benefits for retail motorists will be essentially zero.”

OOIDA, whose nonprofit foundation has studied fuel temperature and fuel mileage logged by truckers in the lower 48 states, believes strongly that a one-time fix at the pump will save consumers money and put an end to “hot fuel.”

“Consumers and specifically small business truckers have been ripped off with hot fuel for decades. Pumps that can't accurately measure a gallon should be upgraded in a prompt and deliberate manner,” OOIDA Executive Vice President Todd Spencer told Land Line.

“For truckers, this rip-off amounts to hundreds of dollars every year. The wimpy response from the energy commission is a testament to the propaganda of petroleum marketers. Spin should not carry the day.”

Energy commissioners did concede in their report that the fairest way to sell fuel is with accurate and reliable measurement standards, which would include compensating for temperature.

To end any dispute commissioners said the California State Legislature should decide once and for all if temperature compensation should be voluntary, mandatory or against the law.

Groups of consumers, including OOIDA members from several states, are part of a federal lawsuit seeking damages from retailers. So far, the U.S. District Court in Kansas has not taken action in the case.

Congress has also debated the topic of hot fuel but has not come to a resolution.

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

 

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