Oil Watchdog

Santa Monica, CA — With the "hot fuel" ripoff of drivers at its
summer peak, Senator Claire McCaskill of Missouri today introduced a
bill (S. 1997) to require a fair gallon’s worth of energy at the gasoline pump.
This Senate action and separate House hearings will also ignite
discussion of wider oil industry practices, said the Foundation for
Taxpayer and Consumer Rights.

"This bill opens a Pandora’s Box for the refining industry," said Jamie Court, president of FTCR and a founder of its OilWatchdog.org
project. "The Congressional debate should lead to examination of not
just the sale of ‘hot fuel’ but broader investigation of major oil
companies’ fuel pricing and sales practices. It’s now time for Congress
and presidential candidates to examine the black box of gasoline
pricing and to make a more fair and honest system for consumers."

Read the text of the bill (S. 1997) here.

Motorists increasingly understand that they lose up to several
cents per gallon on fuel that expands at temperatures above the
"industry standard" of 60 dedgrees, said FTCR. The refining and
marketing arms of oil companies have refused to correct this by
adjusting retail sales for temperature variation, even as their profits
on gasoline sales have soared to record heights in price spikes during
the last two years.

"The combination of a ripoff at the pump and record profits on
the refining of gasoline raises broader questions about the refining
industry," said Judy Dugan, research director of FTCR and
OilWatchdog.org. "Between this Senate bill and separate hearings in the
House, consumers can now expect some answers." (Read the text of the bill here.)

Gasoline additives such as ethanol also expand when
heated, both by the refining process and as a result of hot weather.
Temperature measurement at the pump would compensate for expansion of
such additives as well as the gasoline and diesel being dispensed.

Data from a federal study released in 2004 found an average
national fuel temperature of 64.7 degrees. At current prices, the loss
to motorists nationally from "hot fuel" is $2.3 billion. In California
alone, with a statewide year-round average fuel temperature of nearly
75 degrees, the loss is $450 million to $500 million.

Most wholesale gasoline transactions are adjusted for fuel
temperature, with more gallons delivered for warmer fuel, said FTCR.
The U.S. military also demands temperature compensation for the fuel it
buys, so it is primarily drivers who pay a penalty for hot fuel.

Voters for a federal advisory group, the National Council on
Weights and Measures, approved temperature compensation for retail
gasoline by a two-thirds margin this year, but the measure failed on a
technicality.

"The responsibility for making the sale of gasoline honest is
now back to Congress," said Dugan. "The oil industry, from Exxon’s
headquarters to the corner retailer, will pressure lawmakers to bury
the issue, but voters have the right to expect passage of this bill,
the FAIR Fuel Act (S. 1997)."

Click here for additional background on the hot fuel issue.

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The Foundation for Taxpayer and Consumer Rights (FTCR) is
California’s leading nonpartisan consumer advocacy organization. For
more information, visit us on the web at: www.ConsumerWatchdog.org and www.OilWatchdog.org.