You think you’ve been paying the same amount for gas in the Summer that you do in the Winter? Think again. According to ABC, the House Oversight and Government Reform subcommittee’s recent report says you’ve been overpaying for summer gasoline for years:
Rising mercury means “consumers will pay a hot fuel premium in the range of $1.5 billion,” according to a House Oversight and Government Reform subcommittee report. That estimate is based on the prediction that drivers will buy more than 500 million gallons of gas this summer that will be affected by the hidden hike. […]
The reason behind the rise is simple physics: “As it warms, gasoline expands by volume but not by weight or energy content,” said the report. In effect, hotter weather means consumers pay the same amount as they do in the winter, but drive away with less fuel.
Not an issue some might say, because they are sure the oil companies take this factor into account when they calculate the price of gasoline. And they do, but only at the wholesale level …
(cont.)
The oil industry already accounts for differences.
“Since the 1920s, oil companies have taken into account temperature’s effect on the volume of gasoline in transactions among one another at the wholesale level,” the report says.
Wholesalers base prices on a standard of 60 degrees and adjust the cost if the fuel temperature is higher or lower than that mark.
“But the oil industry does not adjust for temperature in retail sales to consumers,” the report says. “As a result, consumers pay a hot fuel premium when gasoline temperatures exceed 60 degrees, as they do during the summer.”
So the oil companies have been gouging us each summer since the 1920’s? That’s a lot of hidden profits, my friends. The equivalent of $1.5 billion a year (in 2007 dollars) adds up over 80+ years. I’d sure like to see some enterprising State Attorney Generals sue them for consumer fraud, wouldn’t you? Or how about a multi-state class action lawsuit? This is just plain stealing in my book.
Another reason why having Democrats in charge of Congress makes a difference. You think Republicans give a crap if you’ve been paying a premium at the pump because it’s hotter in the summer? Indeed, Democrats who come from the “oil belt” probably don’t care either. But thank goodness for House Oversight and Reform Subcommittee Chair Henry Waxman. Otherwise we’d never have known about this case of highway robbery.
House Oversight and Reform Subcommittee