The real cost of fuel temperature

| September 05, 2007

P.U.M.P. urged restraint in lawmaking pending outcomes of a study urged by Rep. Bart Gordon (D-Tenn.), chair of the House Science and Technology Committee, to the National Academy of Sciences, which would analyze the real costs of installation to consumers. P.U.M.P. and others have suggested that temperature compensation of fuel would ultimately impose costs that would further hike the per-gallon fuel price.

“Before we impose potentially crippling costs on retailers, consumers and state authorities, government has a duty to ensure there is compelling data to support such a radical change in how fuel is dispensed in this country,” NATSO President and Chief Executive Officer Lisa Mullings said.

Diesel purchases in Maryland and Virginia, per Truckers News estimates, netted truckers an estimated average loss of 0.7 cents per gallon between May 2006 and April 2007.

Near-solid red areas on the map, such as in Texas, represent a cents-per-gallon loss, while near-blue areas, such as in Maine, represent a cents-per-gallon gain. Near-pure yellow areas, such as the west-to-east swath from Washington to Pennsylvania, track closely to net zero for the hot (and cold) fuel effect. To estimate the value of your own energy gain or loss, multiply the state’s cents-per-gallon number in the chart on page 36 by the number of gallons you bought there last year and convert to dollars. If the state’s bar is to the right, that’s money in your pocket. If to the left, it’s an average loss. At 120,000 miles a year and 6 mpg, a driver buying equal amounts of fuel in Texas, Oklahoma, Kansas, Nebraska and North and South Dakota loses on average $106 in energy yearly. The colder areas in the Dakotas help to offset the losses in the South. Local factors in various stations may have different effects on real results. Filling stations within immediate proximity of refineries may result in fuel that’s even warmer than average, for instance. Double-walled fiberglass insulated tanks, used more often in recent years, keep fuel at whatever temp it is delivered for much longer than traditional tanks, reducing station locations’ effect on fuel temp.

The northern and southern extremes of the country represent the highest potential losses and gains for the trucking industry associated with hot or cold fuel. In Florida, an average 2.7 cents per gallon worth of diesel is lost. In Maine, close to a full cent per gallon is gained.

A Real-World Case
Chattanooga, Tenn.-based independent owner-operator Michael Goodman’s 2006 IFTA figures indicate he spent most of his time in the fourth quarter on the road in the southern states, logging the heaviest mileages in Alabama, Texas, Georgia and Tennessee. It was a rather chilly quarter, and diesel prices were headed down, but fuel volume fluctuations still cost him an average total of $2.88 worth in energy over the period. In the steamy third quarter, an expensive period for fuel, logging half the miles but running exclusively in the south (northernmost point: Virginia), the total value of energy Goodman lost due to volume fluctuations was $18.29.

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