02/22/08 - The sale of "hot fuel" will bring a long, uncomfortable summer to petroleum marketers, refiners and oil companies with a federal judge's across-the-board decision to let a lawsuit against the practice go forward, said the Foundation for Taxpayer and Consumer Rights and its OilWatchdog project. FTCR said the lawsuit, covering a majority of states, should raise motorists' awareness that they lose up to a dime a gallon from the sale of "hot fuel," especially in the South and Southwest. "Forcing motorists to buy 'hot fuel' is yet another way oil companies cheat us. Drivers' losses boost the bottom line of the oil business, from the oil company down to the retail level," said Judy Dugan, research director of Oilwatchdog.org and FTCR. "A major point of this lawsuit is that drivers have no way of telling the temperature of the fuel they buy, and thus have no way to determine its true value."

The 'hot fuel' scam occurs because gasoline expands as it warms up, for reasons including the refining process, air temperature and solar heating. The expansion means that a measured gallon loses energy as it warms, providing fewer miles per gallon. When gasoline is sold at the wholesale level, it is adjusted for temperature variation from the national standard of 60 degrees. Most retailers also get extra gallons to compensate for temperature expansion. But consumers can buy fuel only by a measured gallon, no matter what its energy content, with warmer gas yielding less energy per gallon. It is notable that in Canada oil companies adjust retail gasoline sales for temperature, because colder than average temperatures there would otherwise give consumers an advantage.

 In California and Arizona, Exxon Mobil has put stickers on its pumps about fuel energy being "affected by temperature" as a tactic to fend off the class action lawsuits against hot fuel sales. Independent truckers, represented by the Owner Operator Independent Drivers Association, based in Missouri, say they lose hundreds of dollars a year from hot fuel. The truckers' group noted that the lawsuit is far from finished but relished the fight. "

America's truckers are closely watching the progress of this case. They want, and deserve to get the same miles per gallon from every fill-up. Especially since they are having to buy an extra 200 gallons, or so, every year due to hot fuel," said John Siebert of the truckers' association. "Having jumped this "motion to dismiss" hurdle, the case is well into the middle of the beginning phase. The judge has asked the attorneys for their plans for the discovery portion of the proceedings. For the plaintiffs, this is not such a hard problem: US fuel consumers found out how retail fuel is really sold, and did so recently. For the petroleum retail defendants, it's going to be a little harder to explain: they've known the impact of temperature on fuel volume since the 1920's, yet managed to keep it very quiet until now.

As Mark Twain used to say, "The doors will open at 7:00 o'clock... the trouble begins at 8:00." Attorney George Zelcs of Chicago, who originally brought the case for motorists, also praised the breadth of the decision: "The oil industry defendants represented to the Court that they had a silver bullet that would end the case and result in the dismissal of all of the consumers claims. Their aim was not true." The decision by District Court Judge Kathryn H. Vratil moves the case to the discovery stage, the "who knew what, when" stage. "Today's legal victory raises the pressure on regulators and lawmakers to fix the hot fuel ripoff. It is even more important to motorists with crude oil over $100 a barrel and gasoline prices rising to match," said Dugan of OilWatchdog.org.