How many gallons are in five gallons of gasoline?
The issue is one of physics. In warmer temperatures, gasoline contracts. So the five gallons that comes out of the nozzle would not have as many Btus as five gallons in a colder climate. But the price doesn’t adjust for that fact, which has prompted charges of consumer fraud against oil companies, notably in southern states.
SIGMA isn’t taking the issue lightly. With more than 30 civil lawsuits filed in the US over the issue, and state legislation proposed in Missouri and Texas, the Society of Independent Gasoline Marketers of America is taking a hard stand.
"I think we are vulnerable here," SIGMA's outside counsel Tim Columbus said at the organization's April 27 legislative meeting in Tucson, in which he called on the industry to fight against mandated temperature correction devices. SIGMA's primary concern is the cost to retailers of retrofitting pumps with the devices.
The issue seems to have shot up the charts on the list of worries for gasoline marketers. Here at The Barrel, where we've attended plenty of the sessions where Columbus, in his inimitable informative and entertaining fashion, brings members up to date on legislative issues, running from global warming down to cigarette sales on Indian reservations. But in the past, temperature control had never been that much of a concern. This year, it took up a good chunk of the legislative update.
The issue is complicated, which is part of the problem, Columbus said. Critics (and the media) are looking for quick sound bites, but claims that "big oil" is ripping off the little guy are more entertaining than even-handed discussions about why certain hydrocarbon mixtures contract at temperatures above 60 degrees, and how many cubic inches are in five gallons of gasoline (it's 231, if you are curious).
Why all the heat over what seems like a technical issue? It's not like local news editors regularly troll the wires in search of a juicy National Conference of Weights and Measures debate.
It wouldn't even be an issue if retail gasoline wasn't hitting $3.00/gal in some parts of the country, one SIGMA member said. Another agreed, saying the issue would not go away as long as the perception remains that "oil companies are making so much" money.
What specifically prompted the debate, Columbus said, was a Kansas City Star piece last August suggesting that consumers were being "ripped off."
You won't see consumers raise a fuss in northern states; they're getting a better deal, as gasoline "expands" in temperatures lower than 60 degrees.
That's not to say temperature correction devices won't catch on in chillier climates. Around 70% of retail stations in Canada use them, according to Pat McGraw of Dresser Wayne, which manufactures the devices.
But in Canada, as you can imagine, it was the industry, not the consumer, leading the charge for temperature controlled pumps.
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