Congressional Hearings

With current gasoline prices averaging more than $3 per gallon, Chairman Dennis Kucinich (D-OH) held a Domestic Policy Subcommittee hearing to examine the high gasoline prices, specifically addressing the "hot fuels" problem – during the summer, the amount of gasoline by weight in a gallon is less than the same gallon pumped during winter.

The June 8, 2007 hearing examined the impact on consumers and attitudes of industry toward the effect of the thermal expansion of gasoline on the practical price of gasoline at the retail pump.

The purpose of the July 25, 2007 hearing was to examine the views of ExxonMobil and Shell on two critical questions: 1) How do they justify opposing temperature compensation at retail, while conducting wholesale transactions with temperature compensation? and 2) How do they justify opposing temperature compensation for retail sales in the United States, while universally embracing temperature compensation at retail in Canada?

Hot Fuel: Are you getting what you pay for at the pump?

A federal court in Kansas and a federal judge in California are allowing lawsuits to proceed against petroleum marketers, refineries and oil companies. The suits claim that petroleum marketers are selling gasoline to consumers that is below industry standard for energy and mass per gallon, without adjusting the price per gallon to reflect these shortfalls.

According to research conducted by Santa Monica-based Foundation for Taxpayer and Consumer Rights (FTCR), under its OilWatchDog project, gasoline expands measurably with heat, causing it to lose mass and energy. Retailers sell gasoline by a measured volume gallon, based on the national standard that the fuel averages a temperature of 60 degrees.

In warm-weather states, FTCR points out, consumers are getting less fuel for their money. For example, if gasoline is at 90 degrees in temperature, the consumer has lost about 2 percent of mass and energy. Based on a price of $4 per gallon, that translates to a loss of eight cents for every gallon, the FTCR says.

They point out that oil distributors give extra fuel to retailers to make up for heat-related loss, but that same practice is not passed on to consumers.

The American Petroleum Institute said that because gasoline is stored in underground tanks, it is close to the accepted average temperature of 60 degrees. But a federal study by the National Institute for Standard and Technology found that the temperature of gasoline in underground tanks in California averaged closer to 75 degrees year-round.

Acknowledging these results, ExxonMobil stations in California and Arizona recently put stickers on its pumps informing consumers about fuel volume being "affected by temperature."