When the temperature of the gasoline crests 100 degrees, the fuel loses roughly one percent efficiency. That may not sound like much, but OilWatchdog.org says its a freakin' scam. "At the higher end of fuel temperatures, 105 degrees, the energy loss is nearly a dime a gallon. Drivers' losses boost the bottom line of oil companies." Needless to say, the group supports the "hot fuel" class action lawsuit against ExxonMobil. They're also offering a free, official-looking "motor fuel ripoff notice" which you should "put on your car or anywhere it will be seen by many. Not, of course, on gas pumps, which could be construed as posting without permission." (This next to the words "STICK IT TO BIG OIL.") In the interests of journalistic objectivity, The LA Times also slams the oil companies for not adjusting prices by temperature ("The oil industry gets a lot of abuse, much of it without merit. But it's on the wrong side of the argument in this case."). Open-minded readers may wish to explore the issue over theoilddrum.com, which proclaims that "hot gas is hot air" and uses (gasp) science to make the point.
Find Reviews by Make:
Read all comments
OK, now the chattering class has decided that they’ve got to do away with the laws of physics. Typical.
It says, right on the pupms, the temperature at which everything is adjusted to.
Have you ever noticed, while pumping gas, that the handle gets cold while you are pumping?
I am just confused about, in this day of science, the black magic that clouds the mind.
Aren’t most gasoline station storage tanks underground? How the heck does the fuel get to 100 degrees, unless the delivery truck that’s been sitting in the hot sun all day just filled the near-empty underground tank?
I smell a soon-to-get-very-rich legal firm behind this nascent class-action lawsuit.
There must be something to this. When refiners sell the gas to wholesalers, they adjust the price based on the temperature of the gas, so why are consumers not afforded the same benefit?
Also, Canada requires retailers to adjust their selling prices based on temperature. Don’t think this is for the benefit of the customer, however. Once the temperature goes low, the energy density goes in the customers favor, not the reseller’s. And in Canada, it rarely gets hot enough for the customer to get shorted, but it frequently gets cold enough for the station to get shorted.
two things:
1) Franz is right, fuel is stored underground, I bet yearly temperature variations are 2-3 degrees. The only person getting screwed is the gas station owner who buys from the truck, but of course that’s adjusted for temperature.
2) All of this nonsense could be avoided if we bought fuel by the pound like the airlines do.
At first I thought this was nonsense, but google is my friend and now I’m more educated. Canada uses temperature compensating fuel pumps because doing so is to the retailer’s advantage. The US doesn’t and lo and behold doing so would be to the retailers disadvantage. Previously I had always assumed that the better fuel economy I measure on our cars when traveling out of state (we live in CA) was all a result of our crappy fuel formulation, but it seems that volume vs. temperature variation may be part of it as well.
A good summary of the US situation is here:
http://www.ooida.com/straight_talk/Temperature%20Compensation%20slides.pdf
For a bit of anger in Canada about their situation, see this:
http://www.cbc.ca/consumers/market/files/cars/gasprice/
Next time you fill up, hold the nozzle open after the pump shuts down and lift the hose high up in the air. Approximately an extra quarter litre for your benefit
By corollary, if the temperature is low, they should be raising prices. I guess Exxon should file a lawsuit against every state in the snow belt for all the free gas we get in the winter.
The costs of monitoring fuel temperatures, changing prices dynamically, and auditing the changes would probably drive the aggregate price up at any temperature. The reason these adjustments are made at the wholesale level is because they buy 10,000 barrels at a time, where a 1% discrepancy means 500 gallons, and where you only need to make a single adjustment for that entire amount. The transaction costs of doing this for every 10 gallon fill-up are astronomically higher.
This doesn’t seem like a big deal to me. Fuel prices are inconsistent across North America, so why does an extra percentage point or two of inconsistency matter? At least with weather factors, everyone in the area is on a level playing field.
Nonemoreblack: Don’t give Big oil any ideas! ;-)
Great post.
“The costs of monitoring fuel temperatures, changing prices dynamically, and auditing the changes would probably drive the aggregate price up at any temperature.” Nonemoreblack, I don’t think you have done enough homework on this topic.
The way the Canadian pumps work is to vary the delivered volume based on temperature in order to deliver the same volume of fuel as it would be at 15 deg. C. The price isn’t changed dynamically, but the volume counter is. The technology isn’t all that hard and is already in widespread use.
The interesting thing is that the industry is all for doing this in Canada where it is to the industry’s advantage but opposed in the US where on the whole the industry would loose.
So, here is a bunch of folks thinking that the gas retailer is getting rich. Perhaps, instead of whining, or suing, they should BUY A GAS STATION!
Most retailers would be happy to sell because they can’t make money on anything anymore unless you come inside and buy a Coke or candy bar.
I bet that you get less work out of your lawyer on Friday afternoons, but they still charge the same hourly rate. We should start a class action lawsuit!
jthorner: You’re right; I in fact did no homework. It wouldn’t have made much difference if I did, because whether the system would revolve around changing fuel volumes or dynamic prices is totally irrelevant.
My point however is entirely separate from the costs of retrofitting pumps versus the actual costs to consumers, etc. The only way we can say that “consumers pay an extra $xx every year for hot gas” is by basing that “extra” upon some baseline. In this case, that baseline is artificially and arbitrarily established as gasoline at 60 degrees Fahrenheit. It doesn’t matter if I spend the same amount in summer on .95 gallons as I do in winter on 1.05 gallons; summer gas and winter gas are not substitutable for one another. An equally fair and rational solution to expensive monitoring equipment would be to change the sign in the summer to say “$2.99/.95 gallon.” Really, this is just a huge pedantic hooplah about the semantics of how we define a gallon.