By BRIAN ECKHOUSE
Las Vegas Sun
July 02, 2008
As gas heats up, it expands, losing mass and energy. The industry standard for a gallon of gas is 60 degrees. That means you will get your money's worth from gasoline only if its temperature is 60 degrees or lower at the pump.
But in the Las Vegas Valley, for instance, it's generally hotter, often far hotter. That's the primary reason valley residents are among the plaintiffs in a massive class action lawsuit that alleges the oil industry and gas station owners are guilty of consumer fraud and conspiracy.
Plaintiffs in the lawsuit come from 25 other states, Washington, D.C., and Guam. Attorneys for the consumers estimate each motorist has to spend, on average, an additional $40 to $100 a year to cover the difference caused by gasoline that is warmer than 60 degrees.
"The volume of gas people are getting in Las Vegas is not what it's advertised for," says Tyson Slocum, director of the energy program for Public Citizen, an advocacy group based in Washington, D.C. On one tank of gas, he says, consumers are barely affected. "But when you add it up over a year's worth of daily commutes, it's not insignificant."
And it becomes more significant as the price per gallon keeps climbing.
Some analysts say heat expansion boosts revenue of oil companies and gas station owners by $1.5 billion annually. The oil industry and its retailers, however, dispute that tally of heat-fueled extra revenue as an "extreme analysis."
Josh Eichberger, vice president of government relations for the National Association of Convenience Stores, argues that competition among retailers negates most of the heat effect. Retailers typically make just a 1-cent profit on a gallon of gas.
Mindy Long, spokeswoman for the National Association of Truck Stop Owners, notes that the composition of gas varies nationwide, so other variables are at play besides temperature.
But Slocum says Public Citizen has found no evidence that competition neutralizes the cost of less-potent gasoline.
"I don't see this as a remedy that supply and demand will successfully address," he says.
Retailers' lobbyists also insist that formal adjusting for temperature is not legal and that they're required to sell a gallon of gas at the industry standard of 231 cubic inches.
But so far, U.S. District Judge Kathryn Vratil, who is presiding over the lawsuit in Kansas City, has rejected the industries' efforts to quash the lawsuit.
It may be a tall task for the industries' attorneys to disprove the contention of consumers that retailers deceived them. According to Vratil, writing in a February court order, the retailers "may have a duty to disclose such information to avoid liability under consumer protection statutes."
Oil companies and retailers, the lawsuit alleges, have been "unjustly enriched."
The resolution of the lawsuit could be years away, and even if the plaintiffs prevail in Vratil's court, an appeal is all but certain.
Retailers, Vratil wrote in February, had yet to "address plaintiffs' contention that they should adjust the price (not volume) of motor fuel to account for temperature."
In the courtroom, she continued, attorneys for the gasoline industry "conceded that it might be permissible under state law to adjust the retail price of motor fuel based on temperatures."
And the defendants, Vratil
added, had "not shown ... that state regulation actually
prohibits them from adjusting the size of a gallon of motor fuel
to account for thermal expansion."
Scripps Howard News Service, http://www.scrippsnews.com
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