Esso feels the heat as forecourts cry foul over fuel

Click to follow
The Independent Online

Esso, target of a boycott by green protesters, could face a legal challenge over allegedly unfair practices in its UK fuel distribution network.

The US oil giant, which has been embroiled in a long- running wrangle over its old Tiger Tokens promotion scheme, is now defending claims that petrol station managers are being cheated out of some of the fuel they have paid for.

This "hot products" problem dogs the fuel retail industry. Other majors including BP and Shell have had a barrage of similar complaints. The difficulty arises because petrol and diesel are changeable substances. The refinery process involves the intense heating of crude oil, whose products emerge at a high temperature. But as fuels cool, the volume decreases. Petrol retailers pay for an agreed volume at the refinery, but by the time the fuel arrives at their petrol stations, a significantly smaller volume hits the pumps.

The problem has festered for years, but a commercial court judge has indicated that Esso could now face specific claims. As part of the Tiger Tokens dispute, Esso is suing 60 former petrol station managers who refuse to pay for the scheme. Esso originally received a summary judgment, but the managers, backed by the petrol-specialist solicitor Ferdinand Kelly, had that overturned. The case is now being heard in the Commercial Court in London. The licencees are confident, and many are making counter claims, among them a judgment on the hot products issue.

"This Esso case has finally put hot products on the agenda," said Ray Holloway, spokesman for the Petrol Retailers' Association. "Product shrinkage is badly hurting people's businesses. We need a proper resolution."

The association, which has crusaded on this for years, is seeking separate legal advice. "With most oil companies refusing to let petrol retailers even see the tanker dipsticks, there is no check on the volume loaded on to the tanker," said Mr Holloway.

"And there is no record for the retailer of the measurement or the temperature of the product as it passes through the refinery terminal."