Volume Corrected To 15° Celsius

Here is a letter that I sent today to Peter Duffy, a columnist for Halifax's Chronicle-Herald. Let's see if anything comes of this.


Mr. Duffy,

I realize that this letter is about a subject that is somewhat tangential to the point of your article, "I fear our hearts have hardened," but would you write an article about the scam that is "volume corrected to 15 degress Celsius"?

No one ever complains about this,although it seems that any time the price at the pump goes up by more than a few cents, there is a flurry of e-mails trying to call for an organized day of not buying gas as a protest. Of course, anyone who doesn't buy on that specified date probably fills up either the day before or the day after, so no real change is made in the gas companies's sales figures, but that is another matter.

This CBC Marketplace report told the story in 1999:

http://www.cbc.ca/marketplace/pre-2007/files/cars/gasprice/

For some reason, even though this issue received national press with that CBC Marketplace story, it is forgotten in this time of the U.S. of going to war to keep the supply of oil coming from the Middle East and Canadian soldiers dying in Afghanistan, ostensibly for peace and democracy, but originally we went there to get Osama (remember?).

http://thetyee.ca/Views/2006/10/06/Afghanistan/

That is another issue for another letter, and certainly a very important one compared to the relative minutae of this letter. However, the effect of volume corrected gasoline amounts to Canadians paying $655,000,000 ANNUALLY for gas they never receive.

The central question is why is gas corrected to 15 degrees Celsius? It is to standardize volume when retailers sell it to unsuspecting consumers. However, the standard of 15 degrees Celsius is beneficial to the retailers, while Canadians are paying for gas that never makes it into their vehicles.

Here is a link that shows Halifax's average temperature.

http://www.worldclimate.com/cgi-bin/data.pl?ref=N44W063+1202+0017800G2

As you can see, at 6.6 degrees, our annual average is nowhere near 15 degrees Celsius. Other than in July and August, our monthly average temperature doesn't even pass 15 degrees.

Well, one may ask, what about Toronto, with its hot summers? Surely, they must have a much higher average annual temperature that would make the 15°C standard a reasonable one? Nope. The average annual temperature in Toronto is one full degree higher than Halifax, at 7.6°C. Even the Big Smoke has only 4 months that average higher than 15 degrees.

So what does this mean to the average consumer?

This website shows the effect of temperature on gasoline:

http://www.users.qwest.net/~taaaz/AZgas.html#HOW%20GASOLINE%20IS%20SOLD%20IN%20CANADA

A quote from that website: "Gasoline volume changes approximately 0.125% for every 1°C change in temperature"

Therefore, a 60 litre weekly fill-up at Halifax's average monthly temperature of -4.9°C in February costs the consumer an extra $1.77 per fill-up, at today's price of $1.179 per litre.

Calculations:

15°C standard minus -4.9°C average = 19.9°C difference

19.9°C times 0.00125 per °C change in gas volume = 0.024875, or about 2.5%

60 litres per fill-up times $1.179 per litre = $70.74 cost of fill-up

$70.74 times 2.5% = $1.77 extra because of volume correction to 15°C

Given our 6.6°C average annual temperature and assuming we drive the same every month for the whole year, the rip-off for a consumer who fills up with 60 litres every week amounts to $38.62 per year.

This takes into account the 2 months of the year that our average monthly temperature is above 15°C.

While this doesn't seem like much, it is flat out theft. We are paying for gas that we never receive!

Transport Canada says there are "About 13.2 million automobiles accounted for 78 per cent of all vehicles in 1995. Some 3.4 million trucks of all types made up 20 per cent of the total. The remaining two per cent of vehicles consisted of 319,000 motorcycles and mopeds and 64,000 buses."

http://www.tc.gc.ca/pol/en/Report/anre1996/tc96_chapter_10.htm

Assuming there has been no growth in these figures and assuming each vehicle uses 60 litres per week (trucks use more, small cars use less), the total larceny adds up to $655,883,460! (Total of 16,983,000 vehicles @$38.62/year)

Could you write a story about this government standard that rips off Canadian consumers? Everyone I talked to about this fact didn't even know that it made a difference in how much money they spend at the pumps. It is a story that gets swept under the rug because the government is the biggest single benefactor, since they earn about half of what we pay for gas in the form of taxes.

This Industry Canada website,

http://www.ic.gc.ca/epic/site/mc-mc.nsf/en/lm01094e.html

shows the government's complicity, explaining it away because other countries use 15 degrees as their standard and we have used it for natural gas and propane for decades. Well, we used to think the earth was flat too! Just because a standard has been used for a long time doesn't mean it is right to do so.

Strangely enough, this Ontario Ministry of Revenue website,

http://www.rev.gov.on.ca/english/bulletins/gt/gas1_2003.html

says in plain language that volume corrected gas is different from non-volume corrected gas. The reference is about 3/4 of the way down the page, under the heading "Ambient Temperature Allowance". Apparently, when the government talks about tax revenue, it makes sure it collects all the money it feels is due.

Thanks for reading this message. I hope you write an article about this issue. $655,000,000 is a lot of money. Canadians shouldn't have to give it to oil companies and the government with no say in the matter.

Best regards,

Phil Kempton

UPDATE: Mr. Duffy responded to me message to him with an e-mail of his own. I won't publish it here, because I didn't ask him if I could, but he seemed to take interest in the isue I had brought up, and said he would keep the information for potential future use. Maybe it was a form response to a reader submission, but I would like to think that Mr. Duffy was sufficiently intrigued to pursue the story on his own.