Try temperature compensation to address rising oil prices

This is in connection with my letter to the editor, “Government can try ‘temperature compensation’ to address rising oil prices,” on the above subject, which saw print last June 14, 2022.

The letter discusses how consumers can save on their fuel purchases through the method called temperature compensation (TC). TC is being done in many countries abroad. In the US, 17 states are implementing TC. Canada and many countries in Europe are doing it.

Oil is sensitive to temperature changes. When temperature rises, the volume of the oil increases or expands. When temperature falls, the volume decreases. The ideal or optimum temperature at which one gets the maximum mileage from the oil is at 15 degrees Celsius. In other words, when the temperature exceeds 15 degrees Celsius, the incremental increase means nothing. In other words, the volume expansion does not bring about increase in mileage.

In tropical countries such as ours, the temperature could reach as high as 40 degrees Celsius, so we pay more than what we should be paying. That is why we should be doing TC in our country. We can save as much as P0.90/liter for gasoline and P0.60/liter for diesel using the old prices before the crisis. Now, with the round of price increases, the savings for diesel is now bigger at P1.10/liter and P1/liter for gasoline.

I was even interviewed on GMA TV Cebu on Sept. 2, 2022. I also furnished on his Facebook page the chair of the Senate committee on energy Sen. Raffy Tulfo a copy of the letter. It seems the Senate is not interested in addressing this problem about oil price increases, which is one reason for increases in fares, prices of basic commodities, and electricity rates.

TC benefits the consumers even when oil prices have gone down even to P1/liter because it is applied to the volume, not to the price of the oil.

Oil dealers operating gasoline stations are the biggest beneficiaries if TC is implemented and should push this initiative. You know why, the dealers buy the oil in bulk in thousands of liters. The oil from the oil terminals are stored in tanks that are fully exposed to the sun and are therefore expanded. Thus, the savings to the dealers are big. Whereas they sell the oil in small quantities (10, 15, 20 liters, etc.) from their storage tanks that are buried underground, and therefore the oil is not that expanded, and therefore the loss in their revenues with TC is very small compared to their savings when they buy the oil.

Ernesto M. Adaya,ernie_adaya@yahoo.com