Fuel Advantage: Avoiding Fuel Scams

With summer on the way, the "hot fuel" debate may be heating up again.


Retrofitting thousands of pumps across the country certainly won’t come cheaply, and this has been roadblock for McCaskill’s legislation—the bill would mandate retrofitting retail pumps and pay for it through a levy on royalty payments made by companies for drilling on federal land.

“It’s very difficult right now to secure that kind of financing for a project like that,” Slocum says. “Anytime you get a big pot of money, you’re going to get other members of Congress who would rather that money be spent on their priorities.”

Moskowitz says if retailers have to pay for the equipment, consumers will end up footing the bill, anyway. There will be additional costs as well, such as additional training for government inspectors to make sure retailers are compliant.

“You’ve got weights and measures officials that go out with meter-provers and make sure the pump is dispensing a true gallon,” he says. “Once you deal with ATC, those inspectors now need to be trained to measure the temperature and do a calculation to figure out if it’s properly adjusting for temperature, so it becomes much more complicated and expensive.”

Further complicating things, the government would also have to create new laws to govern the equipment and its usage.

“(Otherwise) if I’m running a gas station and it’s 72 degrees one day, maybe I turn the ATC measuring device off, and if it’s 58 degrees I turn it back on,” Moskowitz says.

BY THE BOOK

Prentiss Searles, marketing issues manager with the American Petroleum Institute (API), says the National Conference on Weights and Measures, which sets marketplace standards, should arbitrate any concerns or questions, and their current stance is that nothing illegal is going on.

“By law, since the early 1900s, retail sales of motor fuels have been based on a single-size volume metric gallon, and that’s 231 cubic inches, and it doesn’t reference temperature,” he says.

Searles says the allegation that consumers are losing billions of dollars a year because of hot fuel is not accurate.

“Right now, you’re getting what you pay for,” he says. “By definition, consumers aren’t losing money, because they’re receiving a gallon of gas for every gallon of gas they purchase. The unit is posted on the pump; retailers must meet those requirements, and all states go out and check that when you buy a gallon, you get a gallon.”

WAITING GAME

It may be a long time before either legislative or legal actions force a change, but some ongoing studies could shift the balance. California’s Energy Commission is studying the pros and cons of installing ATCs at retail outlets, and the Government Accountability Office is examining the effects of selling temperature-adjusted fuel. Still, most industry experts doubt that much will come of the efforts.

Technology & Maintenance Council general chairman Darry Stuart says mandating temperature controls on all retail fuel pumps in the U.S. would open a Pandora’s Box.

“It’s the way we’ve been buying fuel for years,” he says. “If everything were truly sold on a temperature-compensated basis, is it more accurate? Yes it is. The question is, at what cost?

“At one point in the season, you end up with a gain, another time you might end up with a little bit of a loss. Over time, everything averages out.”

For expanded coverage of other “fuel scams,” watch for the Summer issue of Fuel Advantage, available at www.fuelpub.com

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