Hot gas has The Pantry in some hot water.
The company has been named as a defendant in seven class-action lawsuits that accuse energy companies and gas station operators of selling gas at hot temperatures — a move that reduces fuel’s energy content, the Triangle (N.C.) Business Journal reported.
The Pantry, headquartered in Sanford, made the disclosure in a regulatory filing, meaning the company thinks the lawsuits could have a material impact on business. Some 45 of the suits were filed nationwide in fiscal 2007, the disclosure said. The company, which operates 1,644 convenience stores and gas stations across the Southeast, is a defendant in cases in Florida, Delaware, North Carolina, South Carolina, Alabama, Georgia and Tennessee.
The lawsuits came after the Kansas City Star published a series of articles in 2006 explaining the practice of selling hot gas. Essentially, the paper explained, gas expands as temperatures rise, causing the amount of energy in each gallon to fall. But most stations don’t adjust prices and follow the federal standard that assumes gas is being sold at 60 degrees.
The key here is that the practice is not illegal, and gas stations are not required to adjust their pumps to 60 degrees. The lawsuits, however, claim that in hot weather, consumers received less gas than companies had implicitly agreed to provide. The Pantry, and many other chains, thinks otherwise.
“We believe that there are substantial factual and legal defenses to the theories alleged in these lawsuits,” The Pantry said in its regulatory filing. “As the cases are at a very early stage, we cannot at this time estimate our ultimate exposure to loss or liability, if any, related to these lawsuits.”