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Gross vs Net Gallons
Gross gallons are the volume of fuel as physically measured. Net gallons are that same volume corrected to a standard temperature of 60°F.
The two differ because petroleum products expand when warm and contract when cold. A truck can load 8,000 gallons of warm diesel and deliver 7,950 gallons an hour later without a drop being lost — the fuel simply cooled and took up less space.
Why the correction exists
Volume is a poor way to measure a hydrocarbon, because it changes with temperature while the actual quantity of product does not. What a buyer is really purchasing is the mass — the energy — not the space it happened to occupy at the moment it crossed a meter.
Rather than weigh every load, the industry standardises on a reference temperature of 60°F and converts. Measure the volume, measure the temperature, apply a correction factor for that product, and you get the net volume: what that fuel would measure if it were at 60°F. Two loads with the same net volume contain the same amount of product, regardless of the weather when they were loaded.
The correction factor is product-specific. Gasoline, diesel and propane each expand at their own rate, and propane is the most temperature-sensitive of the common products by a wide margin.
Which number gets used
Both, in different places — which is the root of most confusion about this.
- Terminals commonly load and bill on net. A wholesale purchase is a purchase of product, so the correction is applied at the rack.
- Retail and many end-customer deliveries are on gross. The meter on the truck reads what it reads, and that is what is invoiced.
- Motor fuel taxes vary by jurisdiction. Some tax on net, some on gross, and a distributor operating across state lines is doing both.
A distributor buying net and selling gross is exposed to temperature in a way that is easy to miss: in cold conditions the same delivered gross gallons represent more purchased net gallons, and the margin quietly moves.
Why the delivered quantity rarely matches the order
Temperature is one of several reasons an order for 8,000 gallons does not produce an invoice for exactly 8,000 gallons.
- Temperature correction — the gross-to-net gap described above.
- Truck capacity — a compartment holds what it holds. Loads are filled to the compartment, not to the order.
- Tank capacity at the destination — you cannot deliver more than the receiving tank has room for, and the driver finds out on arrival.
- Retain and heel — a small residual volume can remain in the trailer rather than reaching the tank.
This is why a delivered quantity has to be captured as an actual from the bill of lading and the delivery ticket, rather than assumed from the order. An invoice built on the ordered quantity will be wrong more often than it is right.
What to check on a delivery
- Whether the document shows gross, net, or both — and if only one, which one.
- The temperature recorded at loading, which is what makes the correction auditable.
- Whether your purchase contract and your sales contract are written on the same basis. Buying net and selling gross is a legitimate way to operate, but only if you know that is what you are doing.
How Energy Connect handles it
Energy Connect records both quantities on every loaded line — gross as measured and net as corrected — rather than storing one and deriving the other. Invoices reconcile against the actual delivered quantity captured from the bill of lading, so the number a customer is billed for is the number that reached their tank, and the gross-to-net difference on any load is visible rather than buried in a variance.