Fuel Smarts

Costco "Hot Fuel" Settlement Approved

April 26, 2012

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In an approved settlement for a lawsuit over hot fuel, Costco Wholesale Corp. has agreed to convert gasoline pumps in some states during the next five years to automatically compensate for expansion in fuel due to changing temperatures, reports the Kansas City Business Journal.


The term "hot fuel" refers to the expansion of gasoline or diesel fuel in the warmer months. Critics charge that when the fuel expands, the consumer gets less energy per gallon but pays the same price per gallon. Oil companies have argued that consumers benefitted in cold weather because fuel contracts and then contains more energy per gallon than usual. The companies also claimed that it would be too expensive to equip every retail pump with a temperature compensating device.

Since Costco's settlement, other companies have also reached settlement agreements, including BP Products North America Inc., ConocoPhillips Co., Shell Oil Products US, Casey's General Stores Inc., Valero Marketing and Supply Co., Sam's Club and Wal-Mart.

Costco won't pay a monetary settlement, but plaintiffs' lawyers have asked for $10 million in attorney fees., reports the Business Journal. Class representatives would get $2,000 each. Judge Kathryn Vratil, who approved the settlement, said she will not consider fees until the other hot fuel cases are settled.

"Settlement discussions with other defendants are ongoing and appear promising," Vratil wrote.

The Business Journal reports, "In all, class-action claims against motor fuel retailers in 26 states have been consolidated in Kansas."

Related stories:
Proposed Settlement Would See Costco Address 'Hot Fuel' Issue

Three Major Oil Companies Settle in "Hot Fuel" Lawsuit

Three More Companies Settle in 'Hot Fuel' Suits

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