Fuel pricing policy.

paf1950

In discussion with an employee of a local independent petrol retailer this weekend. He advises that buying fuel from his employers garage is cheaper than from the supemarkets.

The reason for this being, supermarket fuel tanks have underground heating warming the fuel by 2 degrees, causing its expansion. When pumped into your vehicle it then contracts having already been metered. Apparently this is legal and endorsed by the Petrol Retailers Association.

Also, he tells me that there is a maximum price variation that can be applied by his employer. i.e. if supermarket retails at 140p per litre he can go no lower than 139p.

I have experience of working with aviation fuel and know that expansion contraction does occur with temperature change.

Can anyone confirm/deny this story?

pogofish

Well, the RPI Petrol Retailers Association certainly don't endorse it.

In fact they have raised the issue in submissions to Parliament:

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenergy/writev/supply/m40.htm

5.3.2A serious financial issue is the well-researched phenomenon of "hot" product. (Temperature Compensation of Liquid Fuels 1999 : National Engineering Laboratory). Many deliveries, are made at temperatures significantly above those of the dealer’s tank temperatures. "Hot" product, delivered into colder underground storage tanks contracts when it is cooled (petrol cooling by 10oC shrinks by 1.2%) further disadvantaging the dealer as the "invoiced quantity" is not available to be sold. Some suppliers recognise this problem and offer modest "hot" product compensation arrangements.

So it looks like this is more a supply issue rather than retail?

globalds

After looking for about 5 minutes I get these figures

Gasoline expansion coefficient =0.0006 per 1 Fahrenheit.
convert to 1 Celsius ( x 1.8 )= 0.00108

then we say 139 x 0.00108 =0.15p is the difference in price increase (reduced energy in the tank -same volume) for each litre to go up by 1 degree

x 2 for the 2 degree heater = .3p

x 50 litres (my car filling up) = 15p

Maybe your onto something ...But that much fuel would take a while to heat up and the Sainsburys near me seems to have a tanker every 2 or 3 days ..Most people would not even get a degree unless they had a huge heater.

The maths may be massively wrong as it is not something I have been good at before and see no reason it should change today.

paf1950

Pogofish, apologies for that just going on what this gentleman said.

scooby75

Fuel expansion will cost you about a penny a litre, but pumps now include a temperature compensator in a lot of cases. Best thing to do is to use a pump theatres recently been used and don't pull fully on the trigger.