Monday, June 25, 2007

Hot About Gas Prices.

According to a new congressional study, the warm summer weather is going to cost California drives $228 million in inflated gasoline costs. The issue has nothing to do with refining capacity or simple supply and demand—you can blame physics for this one.

In hotter weather, liquid gasoline expands and the amount of energy in each gallon of gasoline drops. Gas is priced at a 60 degree standard and fuel pumps don’t adjust for the temperature.

Barbara Boxer is on the case, and the trial lawyers are already firing off lawsuits throughout the country claiming “unjust enrichment” by fuel retailers (the argument being that consumers are paying taxes at a 60 degree rate for gasoline at much higher temperatures, and retailers are pocketing the difference).

Retailers are respond with the predictable assertion that it’s too costly to make technological fixes to pumps that account for the change.

Is 'hot fuel' costing motorists? [Associated Press]