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Shell shells out for tainted gas: Canadians denied help for problem

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Toronto Star: Shell shells out for tainted gas: Canadians denied help for problem

TONY VAN ALPHEN

BUSINESS REPORTER

Jun. 4, 2004.

Sulphur harms gas gauges in Florida

Oil giant Shell is reimbursing motorists in Florida for fuel gauge repairs made necessary by contaminated gasoline, something its Canadian subsidiary wouldn’t do here last year.

An official for Shell Oil’s refiner in the United States has confirmed it will start sending cheques today to customers who complained about faulty gauges after buying gas containing corrosive elemental sulphur from the company and Texaco.

Johan Zaayman, a spokesperson for refiner Motiva Enterprises, said yesterday Shell has received more than 9,000 claims for the cost of repairs in less than a week from customers in Florida and nearby states after the company acknowledged a problem.

“We’re accepting claims from customers to get reimbursed for the cost of the repairs of the gas gauges,” Zaayman said in a telephone interview from Motiva’s offices in Houston.

“The cheques will begin to go out tomorrow (Friday),” Zaayman said.

In the last week, hundreds of Shell, Chevron and Texaco service stations have sold gas with traces of elemental sulphur, which quickly corrodes the contacts on sending units in tanks and, in turn, triggers faulty gauge readings.

Motorists have run out of gas and stalled when fuel gauges read full but tanks were actually empty.

Like Shell, Chevron says it has set up a special customer hotline and will cover the cost of repairs. Costs could range from $300 to $600 (U.S.), dealers say.

The reaction by Shell in the United States differs from how the company handled customers in the Toronto region last spring and summer.

A Shell official in Canada said yesterday the company handled customers appropriately here by sending them to their dealers for reimbursement of expenses.

“When we learned of the problem, we co-operated with our mutual partners (the auto industry) to understand it,” said Simone Marler, manager of public affairs for Shell Canada Products.

“We then added an ingredient to our gasoline. We directed our customers to their dealers for assistance. Our goal was to make sure our mutual customers were looked after. And they were. The issue has been resolved.”

Marler said she was unaware of the circumstances in the U.S. incident.

Unsuspecting motorists bought gas tainted with elemental sulphur at Toronto-area Shell and Petro-Canada service stations in the spring and summer of 2003. They got inaccurate gauge readings and stalling, a safety hazard on busy roads.

After a lengthy investigation, Shell and Petro-Canada concluded months later their gas contained elemental sulphur.

The two oil companies denied responsibility for the faulty fuel gauges. They stressed their products exceeded industry and government standards.

At one point, a Petro-Canada official said General Motors was responsible because it used an inferior part, but later the oil company said it wasn’t sure what the problem was.

Shell sent customers back to their dealers, primarily GM, for reimbursement of repairs. But many customers expressed dissatisfaction with their treatment by dealers and GM’s refusal to pay for repairs.

A Star investigation showed that GM had encountered the problem in 2000 in parts of Canada and the United States.

GM sent a notice to customers warning them about the problem and corrective action but it did not issue a recall.

It redesigned the fuel sensors so they could tolerate elemental sulphur. However, the company only started using the new sensors in models last year. GM confirmed it accelerated the installation of the redesigned part in more models late last year.

The investigation found GM notified dealers on how to handle customers in last year’s incident, but the company never warned customers.

Earlier this year, GM offered a free oil change and a Petro-Canada cash card worth a total of about $55 to customers who had gauge problems.

In Tampa yesterday, Skip Greaney, fixed operations manager at Gordon Chevrolet, said the number of repairs of fuel gauges in his shop shot up to 42 in May and 10 to 12 in the first two days of this month. There were only nine similar repairs in the first four months of the year, he added. “There’s been a huge spike,” he said.

Meanwhile, two women from Fort Lauderdale, Fla., who say the sulphur in the gasoline damaged their cars, have filed a lawsuit against Shell Oil Co. and Motiva, alleging the companies violated state law by engaging in unfair and deceptive trade practices. Shell owns half of Motiva.

The lawsuit says the companies “knew or reasonably should have known” that the gasoline with the sulphur would have damaged the vehicles but they continued selling the fuel to motorists.

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