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WASHINGTON, D.C. -- Three oil giants have agreed to settle legal action that accused them of profiting from hot fuel.
BP Products North America Inc., along with ConocoPhillips Inc. and Shell Oil Products US reached the settlement over lawsuits dating back to 2007. The issue behind hot fuel refers to when diesel and gasoline is sold warmer than the standard 60 degrees. While fuel temperature is compensated for at all points of the refining and wholesale fuel process, it is not at the retail pump. When fuel is warmer than the standard, it expands, giving consumers less energy for the price, as CSNews Online previously reported.
The Kansas City Star reported that attorneys for the three companies told the U.S. District Court that "they have reached a binding settlement agreement" with the plaintiffs who filed the lawsuits, according to a court document signed by Judge Kathryn H. Vratil.
The settlement could contribute to a fix for hot fuel in which pumps adjust the amount of fuel pumped depending on its temperature. However, details of the settlement, which would apply to all the class-action lawsuits filed in the various states, weren't immediately available. The agreement also still has to be approved by Vratil before taking effect, the newspaper added.
Attorneys for the plaintiffs who sued the companies would not comment. A spokeswoman for Shell Oil said more information would be disclosed as the settlement makes its way through the court.
"I can verify that a preliminary settlement has been reached in the temperature-correction cases around the country," Shell spokeswoman Kayla Macke told the news outlet. "The settlement agreement is designed to fully resolve the cases against the parties to the settlement."
Judy Dugan, research director for Consumer Watchdog, a California public interest group, said the settlement could be a victory for consumers, but it depends on the details and whether it actually gets temperature-adjusted fuel to the market. She said she hopes this indicates a dramatic shift in the entire oil industry's opposition to a hot-fuel fix.
Costco was also involved in the litigation, but settled in 2009. As CSNews Online reported, Costco agreed to install automatic temperature compensation (ATC) equipment at its pumps. The move affected Costco motor fuel sales in Arizona, California, Florida, Georgia, Kentucky, Nevada, New Mexico, North Carolina, Tennessee, Texas, Utah and Virginia.