Costco agrees to install temperature-correcting fuel pumps
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Costco has agreed to install new fuel pumps at its warehouse stores in California and 13 other states to adjust prices when fuel temperatures rise above the industry standard of 60 degrees.
The agreement would settle Costco’s involvement in a lawsuit filed by consumers against oil companies and fuel retailers, contending that they overcharge drivers by selling fuel that contains less energy because it expands as it gets hot.
Fuel sellers adjust for warm temperatures when they buy at the wholesale level but not when they sell to consumers. Some estimates place the cost to consumers at $2 billion or more a year.
Under the deal, Costco will install temperature-correcting pumps in seven other states and the District of Columbia if it begins buying temperature-adjusted fuel at the wholesale level in those areas.
The proposed agreement, which was signed Wednesday, will be implemented over five years if approved by a federal judge in Kansas, where several lawsuits were consolidated two years ago.
Other than California, the states where Costco would sell temperature-corrected fuel are Alabama, Arizona, Florida, Georgia, Kentucky, Nevada, New Mexico, North Carolina, South Carolina, Tennessee, Texas, Utah and Virginia. If any state forbids the installation of such pumps, Costco would be exempt
there.
“This is fantastic news for consumers,” said Judy Dugan, research director of Consumer Watchdog, a Santa Monica-based advocacy group. “Costco is taking the lead in offering drivers gasoline that has the same amount of energy in every gallon, living up to its reputation as a consumer-friendly place to shop.”
Right now, only Hawaii requires fuel retailers to install automatic temperature compensation devices on pumps.
-- Nancy Rivera Brooks
