this may have something to do with it....
The oil industry has known for 100 years that gasoline expands with
temperature. As it warms, gasoline expands by volume but not by weight or
energy content. Since the 1920’s, the oil industry has taken temperature into
account for wholesale transactions, and use a 60 degree Fahrenheit standard
when measuring gasoline at wholesale. But the oil industry does not adjust
for temperature in retail sales to consumers. As a result, consumers pay a
Hot Fuel Premium when gasoline temperatures exceed 60 degrees, as they do
during the summer.
• 513.8 million gallons of gasoline sold in the summer 2007 will be attributable
to the thermal expansion of gasoline.
• Consumers will pay a hot fuel premium of about $1.5 billion in the summer
2007.
BACKGROUND
Gasoline expands when temperatures rise and contracts when temperatures fall. The
energy content of gasoline, however, is directly related to its weight, not its volume.
Therefore, the energy content of gasoline does not correspondingly increase when
gasoline volume expands. The standard coefficient of gasoline’s expansion/contraction
equals 0.069 % per degree Fahrenheit.
At wholesale, oil companies buy and sell to each other at a 60 degree standard.
Since the 1920’s, oil companies have taken into account temperature’s effect on the
volume of gasoline in transactions among one another at the wholesale level. Wholesale
transactions are temperature-compensated at a standard of 60 degrees.
At retail, oil companies buy at one temperature and sell to consumers at another.
However, retail sales are not temperature-adjusted. Though technology exists and has
been accepted for near universal use in Canada, no U.S. retailer of gasoline compensates
for temperature when selling to consumers. As a result, when temperatures of gasoline
rise above the 60 degree standard, as is the case in the U.S. during the summer, the
amount of gasoline by weight decreases in a gallon, and the effective price per gallon
increases.
For instance, let’s say that Consumer C pumps 20 gallons at Retailer D’s gas station, and
assume that the actual temperature of the gasoline is 90 degrees Fahrenheit, and the
consumer is paying $3.50 per gallon. Due to the thermal expansion of gasoline, the
retailer only had to deliver 19.59 temperature adjusted gallons to make 20 gallons at 90
degrees. The consumer, therefore, paid the retailer a premium on top of his costs for the
gasoline and station operation, profit and excise taxes of $1.44. Stated another way, the
consumer effectively paid about $3.57 per gallon, not the advertised $3.50.
source:
http://www.consumerwatchdog.org/reso...lUSAJune07.pdf
also check....
Richard Suiter House Oversight & Government Reform Subc on Domestic Policy 6-8-07
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