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"Hot Fuel" Bilks Consumers, Lawsuit Charges

Fuel Expands When Hot, Delivering Less Energy Per Gallon

December 18, 2006

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Truck drivers and motorists in seven states have filed a complaint charging 17 oil companies and gasoline and diesel retailers overcharged at the pump for fuel heated above the industry standard.

The "hot fuel" provides less energy than a standard gallon and bilks consumers of more than $2 billion nationwide, according to the complaint.

"Automobile travel and small truck traffic will be heavy during this holiday season," said Public Citizen President Joan Claybrook. "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."

For decades, fuel retailers have been 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 the U.S. 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.

With U.S. retail pumps, 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.

"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," said Claybrook

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