Refiners Pay $21.6 Million to Settle Hot-Fuel Disputes

Date : 06/19/2012 @ 11:52AM
Source : Dow Jones News
Stock : Conocophillips (COP)
Quote : 43.65  1.04 (2.44%) @ 7:59PM

Refiners Pay $21.6 Million to Settle Hot-Fuel Disputes

Valero (NYSE:VLO)
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   By Ben Lefebvre 
 

Six refiners have agreed to pay $21.6 million to settle a class-action complaint that they were selling motor fuel at prices that didn't reflect the effect of high temperatures on fuel volume and quality, according to a filing in U.S. District Court in Kansas.

BP PLC (BP, BP.LN), Valero Energy Corp. (VLO), Citgo Petroleum Corp., ConocoPhillips (COP), Exxon Mobil Corp. (XOM), Shell Oil and Sinclair Oil Corp. had been defending themselves for nearly five years against the so-called "hot fuel" case. Plaintiffs argued that the refiners charged normal prices for fuel that had expanded in volume because of high temperatures and therefore contained less energy per gallon.

BP, Exxon Mobil, ConocoPhillips and Shell each agreed to pay $5 million in settlements while Sinclair and Citgo each agreed to pay $800,000. ConocoPhillips in May spun off its refining arm into Phillips 66 (PSX). Shell is the American arm of British oil and gas producer Royal Dutch Shell PLC (RDSA.LN, RDSB.LN).

Valero decided to not pay a settlement but instead to post the actual temperature of the motor fuel at its station's underground storage tanks in 26 states along with information on how heat affects the fuel's energy content. The company also will pay $4.5 million in attorney fees and litigation costs.

Write to Ben Lefebvre at ben.lefebvre@dowjones.com

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