Petrol Temperature National Study
Client: Australian Institute of Petroleum
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| Data collection was an enormous logistical task for this national
study of petrol temperatures. Sophisticated measuring equipment was incorporated into
seven rigs that were towed in trailers to 120 selected petrol stations around Australia.
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When a product is distributed nationally, its
properties may vary between locations. How can this be reliably
assessed?
The Australian Institute of Petroleum (AIP) commissioned CSIRO to investigate such a
problem. The CSIRO study concerned the temperature of petrol deliveries and sales at
different locations around Australia. It involved determining the average national
temperatures of deliveries and sales at service stations to a specified level of accuracy.
This is important because the value of a litre of petrol varies with temperature.
Typically, petrol is sold by volume. However, as its temperature changes, petrol slightly
expands or contracts. A change of eight degrees Celsius results in about a one per cent
change in volume.
Data for Decisions
The data collection process involved the constant monitoring of petrol sales at eight
service stations around Australia, each carefully selected for their different seasonal
temperatures. Three of the service stations were further equipped with instruments to
measure the temperature of petrol at a number of points. All of these data were recorded
24 hours a day for 12 months.
The Ministerial Council of Consumer Affairs was concerned that nationwide fuel sales at
different temperatures might lead to some consumers paying more for fuel than others. AIP
wanted to ensure that it was not forced into temperature compensation for fuel sales
without appropriate research to inform the decision. AIP needed to determine average
national temperature values, which correctly accounted for the inevitable fluctuations of
petrol temperatures in places with different climates, from the chills of Hobart to the
humid heat of Darwin.
To determine these values, CSIRO researchers designed a sophisticated methodology,
audited and monitored the necessary data collection (carried out by EMAIL Electronics),
analysed the data, modelled the sales at service stations and reported the results. CSIRO
measurement specialists approved and calibrated the instruments used for data collection.
In addition, the research team organised seven rigs, fitted with special
instrumentation, to travel to over 120 service stations nationwide. The rigs met petrol
tankers twice each season, to measure the temperatures and volumes of a random sample of
deliveries at these service stations.
The study was a highly complex and detailed one, costing around $2 million. The key to
the project’s success, according to Mr Ewen Macpherson, Manager of Government and
Public Policy at the AIP, “is CSIRO’s deserved reputation as a centre of
knowledge, technical excellence and independence.”
On the basis of information obtained through the study, the Ministerial Council decided
against the introduction of mandatory temperature compensation. “AIP estimates that
this decision”, says Macpherson, “has saved the oil industry and Australian
consumers some $300 million in capital expenditure and $50 million per year in operation
costs.”
The methodology involved in the project has potential applications in other industry
sectors involving measuring properties of a product with a national distribution. Data
collection was an enormous logistical task for this national study of petrol temperatures.
Sophisticated measuring equipment was incorporated into seven rigs that were towed in
trailers to 120 selected petrol stations around Australia.
Client Feedback
The CSIRO work formed part of a package which evaluated the potential costs associated with the introduction of the temperature correction of petroleum products sales at the wholesale and retail levels. The estimated costs to both industry and consumers of mandating temperature correction would have been $300 million in capital costs and 50 million in annual operating costs. The Ministerial Council of Consumer Affairs relied heavily on the CSIRO report and decided that it would not proceed with mandatory temperature correction. The key to this is CSIRO's deserved reputation as a centre of knowledge, technical excellence and independence.
Ewen Macpherson, Manager, Government and Public Policy, Australian Institute of
Petroleum
December 1996
Further Information
For further information, please contact Mark Westcott
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