Gasoline Marketing:

Consumers Have Limited Assurance That Octane Ratings Are Accurate

RCED-90-50: Published: Apr 16, 1990. Publicly Released: Apr 26, 1990.

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Pursuant to a congressional request, GAO reviewed the Federal Trade Commission's (FTC) and the Environmental Protection Agency's (EPA) implementation of gasoline octane certification and posting requirements.

GAO found that: (1) FTC and EPA did not monitor compliance with octane posting requirements or use octane test results to prosecute violators; (2) there were no federal controls to ensure that gasoline octane postings were accurate; (3) over 9 percent of the gasoline sampled between 1979 and 1987 misstated octane ratings by more than one-half point; and (4) one-time tests of gasoline octane levels in states that did not have an octane testing program revealed that mislabelling ranged from 22 to 53 percent. GAO also found that: (1) there was more potential for mislabelling to occur at distributors or retail stations than at refineries, pipelines, or bulk terminals because those locations lacked extensive quality control programs to test octane ratings; (2) FTC limited octane ratings to traditional gasoline fuels and excluded newer gasoline-alcohol blends from posting requirements; and (3) legislation authorized only limited civil remedies and penalties for mislabelling violations.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In October 1992, PMPA was amended by the Energy Policy Act of 1992. Title XV of the Energy Policy Act, Octane Display and Disclosure, requires octane postings for automotive fuels in addition to gasoline.

    Matter: Congress should amend the Petroleum Marketing Practices Act (PMPA) to include octane certification and posting for gasoline-alcohol blends and other alternative motor fuels that may become available to reduce air pollution.

  2. Status: Closed - Implemented

    Comments: In October 1992, PMPA was amended by the Energy Policy Act of 1992. Title XV of the Energy Policy Act, Octane Display and Disclosure, provides states more authority to enforce automotive fuel posting requirements by permitting them to use remedies and penalties that they believe effective in ensuring the accurate posting of octane ratings.

    Matter: Congress should amend PMPA to make it clear that states may employ a range of remedies broader than those available under PMPA to enforce octane posting requirements.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On June 21, 1991, FTC and EPA testified on the options to monitor compliance of the octane and posting requirements of PMPA. Also, FTC is conducting octane mislabelling investigations; in March 1991 started a multiyear survey of gasoline distributors to monitor compliance; and is cooperating with state enforcement efforts. Accomplishment report was taken on related legislative recommendations.

    Recommendation: The Chairman, FTC, and the Administrator, EPA, in consultation with the appropriate congressional committees and the states, should develop and assess the options that could be employed to monitor compliance with the PMPA octane certification and posting requirements. Such options should include a total federal role, joint federal-state roles, and a total state role in implementing PMPA requirements. This analysis should include, among other things, the benefits and costs of the various options, including necessary control measures, as well as milestones for their implementation.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: On June 21, 1991, FTC and EPA testified on the options to monitor compliance of the octane and posting requirements of PMPA. Also, FTC is conducting octane mislabelling investigations; in March 1991 started a multiyear survey of gasoline distributors to monitor compliance; and is cooperating with state enforcement efforts. Accomplishment report was taken on related legislative recommendations.

    Recommendation: The Chairman, FTC, and the Administrator, EPA, in consultation with the appropriate congressional committees and the states, should develop and assess the options that could be employed to monitor compliance with the PMPA octane certification and posting requirements. Such options should include a total federal role, joint federal-state roles, and a total state role in implementing PMPA requirements. This analysis should include, among other things, the benefits and costs of the various options, including necessary control measures, as well as milestones for their implementation.

    Agency Affected: Federal Trade Commission

  3. Status: Closed - Implemented

    Comments: In June 1991, EPA and FTC apprised the appropriate congressional committee of the results of their efforts to determine the proper federal and state roles and options for satisfying the requirements of PMPA. Accomplishment report was taken on related legislative recommendations.

    Recommendation: The Chairman, FTC, and the Administrator, EPA, in consultation with the appropriate congressional committees and the states, should report the results of their evaluations and their recommendations, along with funding requirements and recommendations for any needed legislative changes, to Congress.

    Agency Affected: Environmental Protection Agency

  4. Status: Closed - Implemented

    Comments: In June 1991, EPA and FTC apprised the appropriate congressional committee of the results of their efforts to determine the proper federal and state roles and options for satisfying the requirements of PMPA. Accomplishment report was taken on related legislative recommendations.

    Recommendation: The Chairman, FTC, and the Administrator, EPA, in consultation with the appropriate congressional committees and the states, should report the results of their evaluations and their recommendations, along with funding requirements and recommendations for any needed legislative changes, to Congress.

    Agency Affected: Federal Trade Commission

 

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