Hot Oil? More like Hot Air

There are now lawsuits alledging price fixing by oil companies that costs US drivers up to $2.3 billion a year in extra costs for gasoline based on a (supposed) average annual temperature in the US of 65 degrees:

http://www.huffingtonpost.com/jamie-court/hot-gas-shorting-driver_b_28625.html

Guess again:

Actually, we BENEFIT from this. Why? Because actually the average annual temperature in the US is LESS than 60 degrees: In 2006, the 2ND HOTTEST YEAR ON RECORD, the average annual temperature in the US was just 54.9 degrees...

Source: http://www.ncdc.noaa.gov/oa/climate/research/2006/ann/us-summary.html

Well, surely, California has it worse, right?

Yes, but the temperature still doesn't reach 65 degrees. In San Diego, the average annual temperature is just 64.2 degrees.

Source: http://www.cityrating.com/citytemperature.asp?City=San+Diego
In Los Angeles, it is 63 degrees:

Source: http://www.cityrating.com/citytemperature.asp?City=Los+Angeles

In San Jose, they are actually BENEFITING FROM THIS POLICY because the average is 57.1 degrees:

http://www.cityrating.com/citytemperature.asp?City=San%20Jose

In Sacramento, it is 60.8 degrees:

http://www.cityrating.com/citytemperature.asp?City=Sacramento

Surely the Southwest is burning up (all figures come from cityrating.com and were corroborated via multiple weather websites)? Not exactly, yes, there are a few cities that are hot:

Phoenix, AZ: 72.6 degrees
Las Vegas, NV: 67.1 degrees
Tuscon, AZ: 68.4 degrees

But many are not:

Roswell, NM: 60.8 degrees.
Albuquerque, NM: 56.2 degrees
Reno, NV: 50.8 degrees
Clayton, NM: 53.2 degrees
Flagstaff, AZ: 45.8 degrees

What about the South? (all figures come from cityrating.com and were corroborated via multiple weather websites)

Atlanta 61.3 degrees
Wichita Falls, TX: 63 degrees
Birmingham, AL: 61.8 degrees
Charlotte, NC: 60.1 degrees
Charleston, SC: 55 degrees
Greensboro, NC: 57.8 degrees
Amarillo, TX: 56.9 degrees
Huntsville, AL: 60.3 degrees
Richmond, VA: 57.7 degrees
Tupelo, MS: 61.7 degrees

The Midwest?
Oklahoma City, OK: 60 degrees
Rapid City, SD: 46.6 degrees
Des Moines, IA: 49.9 degrees

And don't even get me started on the Mid-Atlantic, Northeast and Rust Belt:

Philadelphia, PA: 54.3 degrees
New York City, NY: 54.7 degrees
Boston, MA: 51.3 degrees
Buffalo, NY: 47.7 degrees
Cincinnati, OH: 51.7 degrees
Cleveland, OH: 49.6 degrees
Detroit, MI: 48.6 degrees

So for many of us, apparently, the oil companies are actually doing something to the consumer's benefit! Yet some lawyers want to use 'fuzzy math' to line their pocketbooks. In addition, this is something that consumers can work to their advantage. By gassing up in the early morning, just before going to work, the average yearly temperature will likely be lower than the figures given above.

Zagros Madjd-Sadjadi, Ph.D.
Assistant Professor of Economics
Winston-Salem State University
sadjadizm@wssu.edu
(336) 750-2398

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