Costco Fixing Pumps to Compensate for Hot Fuel

April 23rd, 2009 · 1 Comment

Okay, this isn’t an issue with Costco selling stolen fuel (‘hot’), it’s actually about them settling a lawsuit about fuel temperature.  Apparently, if the fuel is hotter than average (60 degrees), you get less energy from it, which can cheat consumers.  The cost of hot fuel is estimated to cost consumers in the neighborhood of $2 Billion (yes, that is with a ‘b’) a year.  So, Costco has agreed to change its pumps, the first retailer to do so, to compensate customers for the lower energy value of hot fuel.

Retail pumps in America give consumers 231 cubic inches per gallon which puts out a certain amount of energy.  So, the crux of the issue is that the same amount of fuel is sold as a gallon, regardless of temperature, but when the fuel gets hot it expands.  As the fuel expands, the amount of energy declines.  Thus, consumers are getting less bang for their fuel buck when the fuel is over 60 degrees.

This whole thing came about after a lawsuit in the US District Court in Kansas City, Kansas against retailers and oil companies for selling hot fuel.  To settle their part of the lawsuit, Costco will be changing its pumps across the hottest regions of the country, including Texas, Florida, and California.  Costco has also promised in states such as Kansas and Missouri not to buy temperature-adjusted fuel wholesale and then sell non-adjusted fuel to customers.

For more information, you can read the full story here: Costco Offer Would Fix Hot Fuel


Tags: Costco in Blogs · In the News Share

1 Response so far ↓

  1. 1 Dave // 2009.04.29 at 6:29 pm

    This is interesting indeed. For a long time now I’ve noticed signs on both Costco and other gas stations warning people that the pumps do not adjust the price per unit energy delivered but instead charge a fixed price per volume delivered. I think these became prevalent after some _60 Minutes_, or other nightly news magazine, stories pointed out to people that the density of a liquid varies by temperature, and thus the price they pay per mile traveled could change according to weather.

    But let’s be realistic here folks, the temperature underground where the tanks are kept is fairly constant and probably doesn’t vary that much from summer to winter even in places where there are wild temperature swings, much less on an hour by hour or day-to-day basis. Although I guess that would depend on how deep the tanks are. Which, if I remember correctly, also varies per each state’s regulations. Perhaps they’re at a shallower depth in some states and thus the temperature fluctuates more for those poor people? Or is the issue that some station operators are specifically heating their gas tanks in order to purposely lower the fuel density?

    BTW, I find the second paragraph in the post above confusing. Isn’t the volume of a gallon the same number of cubic inches all the time, no matter what temperature the material in that space is? After all, those are both measurments *of* volume. I think the point is that the price someone pays for a gallon is set assuming an energy density of gasoline at 60 degrees F. Thus anyone paying that same rate for gas at a higher temperature is not getting the right amount of energy, because they aren’t getting the same density gasoline.

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