Oil companies settle “hot fuel” class-action lawsuits

Updated Apr 13, 2012

BP Products North America Inc., ConocoPhillips Co. and Shell Oil Products US reportedly have agreed to settle lawsuits accusing them of cashing in on “hot fuel” – diesel and gasoline sold without adjusting the volume for temperature. Gasoline and diesel expand in warmer months, so a gallon of fuel in the summer contains less energy than what customers pay for at the pump.

The Kansas City Star reported in 2006 that hot fuel likely would cost consumers $2.3 billion that year, a price tag that is now about $3.5 billion at today’s diesel and gasoline prices. After the Star published a series of stories on hot fuel, class-action lawsuits accused dozens of companies ranging from giant oil companies to convenience store chains of adhering to the practice.

The first of the lawsuits is set to go to trial next month in federal court in Kansas City, Kan., but now reportedly without participation from BP, ConocoPhillips and Shell. Details of the settlement – which would apply to all the class-action lawsuits filed in various states – haven’t been announced since those still have to be approved by Judge Kathryn H. Vratil before taking effect, the Star reported.

The lawsuits seek solutions such as retrofitting pumps so that they automatically would adjust volume of a gallon of fuel depending on the temperature, which has been done for years in Canada. But a settlement that would require the three companies to make that specific improvement to fuel pumps nationwide may be unworkable since they have sold off most of their retail stations, even though those stations still sell their brands.