You’ve seen it before: You order a load of fuel and they deliver it as ordered, or so you thought. You look at the BOL and wonder why the gallons are listed in both gross and net amounts, and why the number of gallons invoiced is lower or higher than you ordered. If you’ve ever thought the total gallons you pay for seems to change with the weather, you’re not that far off.
“Why the Difference?”
Like most substances, motor fuel expands or contracts depending on its temperature. In the U.S., 60o Fahrenheit (about 15o Celsius) is recognized by the fuel industry as the zero-point on the temperature scale where fuel is considered “normal” in energy content, weight, and volume—the actual space it occupies. So, at 60oF, a normal gallon of fuel will occupy 231 cubic inches of space, but that same gallon at 80oF would expand to 233.7 cubic inches, and at a colder 40oF, would contract or “shrink” to 228.3 cubic inches.
When is a gallon not a gallon?
In a perfect world, if you ordered a typical 8,500-gallon load of unleaded, you could count on the fuel’s temperature at the rack being equivalent to the temperature inside your tanks, and you would be sure to end up with exactly the 8,500 gallons you paid for.
But, back to reality. In hotter regions of the country, the warmer, at-the-rack temperature of your 8,500-gallon load is going to hit your cooler, insulated tanks and shrink, sticking you with something less than the 8,500 gallons you paid for. On the flip-side, in Minnesota, for example, those 8,500 glacial gallons will expand as your tanks warm them, giving you more fuel than you paid for, while causing your supplier to suffer a loss about the size of your gain.
So, since you can’t change the laws of science, about 100 years ago, the fuel industry changed how it measured fuel to account for its fluctuating volume as it’s transferred from one temperature to another.
“BUT HOW DOES THAT TRANSLATE ON MY BOL?”
Note: What is a BOL? Read the wiki article.
Today, a thermodynamic formula is used to calculate the size of fuel’s expansion or contraction caused by the difference in temperature, if any, between the fuel at the rack and the 60oF benchmark. The number of gallons dispensed at the rack—the “gross” gallons—are automatically adjusted up or down to make up for the expansion or contraction of fuel above or below 60oF. The result of that calculation produces the temperature-corrected “net” gallons.
For example, this chart shows how these volume adjustments would play out on 10,000 gallons of fuel as its temperature changes by ten-degree increments above and below 60oF.
+ or –
“IS THIS JUST A COMPLICATED WAY OF TELLING ME I’M NOT GETTING WHAT I PAY FOR?”
The answer is, no. In fact, the gross-to-net conversion is designed to ensure that you do get what you pay for—no less and no more. As noted above, without temperature correction, if you purchased warmer, expanded fuel, you will have paid for what may appear to be a certain amount of fuel, but which will later shrink in your cooler tanks, sticking you with less fuel than you paid for. Conversely, purchasing colder, shrunken fuel, without adjusting for its eventual expansion in your tank, will gift you with the extra fuel that filled the space created by the contracted, colder fuel which, upon expansion, would give you more fuel than you paid for. Good for you—bad for your supplier.
For these reasons, to ensure both buyer and supplier get what they bargain for, the wholesale segment of the industry generally buys and sells fuel by net gallons in the predominantly warmer southern regions of the country, and by gross gallons in the north, where a colder climate prevails. Which is why Desert Fuels’ customers in Arizona, New Mexico, Texas, and the greater southwest generally pay for net gallons, while our business in Michigan, Illinois, Indiana, and the colder north, trade in gross gallons.
KEEPING THEM HONEST—“How are the Measurements Verified?”
In the U.S., a state’s weights and measures agency typically certifies the accuracy of the devices used to measure fuel transported from the rack to you. As fuel is pumped from the rack into carriers, a highly precise temperature meter automatically calculates the gross and net gallons dispensed. As long as the conversion equipment is maintained, and the integrity of the measures is confirmed, the system ensures both accurate delivery and honest billing… regardless of the weather.
Gross/Net Calculator for Gasoline and Diesel
We have created a calculator to make this complex calculation more simple. You can see it below (it is a google sheet) or you can view it fullscreen here.