Case No. RF272-57472
June 13, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Applicant:Franks Burner Service, Inc.
Date of Filing:May 24, 1988
Case Number: RF272-57472
This Decision and Order will consider an Application for Refund submitted by Franks Burner Service, Inc. (Franks). In its Application, Franks requests a refund from crude oil overcharge funds. These funds are available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under the provisions of 10 C.F.R. Part 205, Subpart V. As explained below, we will deny the Application.
Pursuant to DOE policy, purchasers of refined petroleum products were permitted to apply to the OHA for a refund from crude oil overcharge funds under the OHA's jurisdiction until the filing deadline of June 30, 1995. See Statement of Modified Restitutionary Policy to be Implemented in Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986) (the MSRP). We have established refund procedures for these funds which have been made available through consent orders entered into by the DOE and numerous firms that sold crude oil during the price control period. E.g., Berry Holding Co., 16 DOE ¶ 85,405 (1987); A. Tarricone, Inc., 15 DOE ¶ 85,495 (1987) (Tarricone); Mountain Fuel Supply Co., 14 DOE ¶ 85,475 (1986).
The refund procedures that we have established specify that an applicant generally must: (1) document its purchase volumes; and (2) show that it was injured by alleged crude oil overcharges. We presume an end-user applicant absorbed rather than passed on alleged crude oil overcharges, and we therefore presume that crude oil overcharges injured such an applicant.(1)In contrast to an end-user applicant, an applicant that was not an end-user -- a refiner, reseller, or retailer -- must submit a detailed
demonstration establishing that the alleged crude oil overcharges caused it injury. 52 Fed. Reg. 11737 (April 10, 1987), reprinted at 6 Fed. Energy Guidelines ¶ 90,512. See definition of "refiner," "reseller," and "retailer" at 10 C.F.R. § 212.31, reprinted at Fed. Energy Regulations, "Petroleum Regulations, 1974- 81."
Applicants that were not end-users are not presumed injured because of the Entitlements Program. During the price control period, the Entitlements Program spread crude oil overcharges evenly throughout the petroleum industry. This resulted in a uniform increase in the cost of all crude oil to refiners.(2)Applicants that were not end-users received compensation for the increased costs of petroleum products purchased from refiners through higher selling prices in their marketplace.
It is unlikely that any applicant that was not an end-user had to absorb the crude oil overcharges. Therefore, we have not established a presumption of injury for such an applicant in this proceeding. To make a sufficient showing of injury, an applicant that was not an end-user must: (1) show that the selling prices in its market did not increase because of the crude oil overcharges; and (2) show that it was thus unable to pass through the overcharges to its customers. Chets Cedarville Quicki-Stop, 17 DOE ¶ 85,081 (1988).
Franks Application for Refund is based on its claimed purchases of 4,519,170 gallons of refined petroleum products. According to its Application, Franks sold these products as a retail fuel oil dealer. As a reseller, Franks must provide a detailed demonstration to establish injury in this proceeding.(3)Franks did not submit a detailed showing of injury with its Application. Because we are unable to find that Franks suffered injury from crude oil overcharges, we will deny Franks Application for Refund. See Nox-crete, Inc., 22 DOE ¶ 85,120 (1992).
It Is Therefore Ordered That:
(1) The Application for Refund filed by Franks Burner Service, Inc. (Case No. RF272-57492) is hereby denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: June 13, 1997
(1) We consider an end-user whose business was unrelated to the petroleum industry, and who was not subject to the price regulations of the DOE or its predecessors, to be the ultimate consumer of petroleum products.
(2) The DOE established the Entitlements Program to equalize access to the benefits of crude oil price controls among all domestic refiners and their downstream customers. To accomplish this end, the DOE required refiners to make transfer payments among themselves through the purchase and sale of "entitlements." The program evenly dispersed overcharges resulting from crude oil miscertifications throughout the domestic refining industry. See Amber Refining, Inc., 13 DOE ¶ 85,217 (1985).
(3) An applicant is presumed injured under the end-user presumption only when the petroleum products were purchased for use in a business that is (1) not related to the petroleum industry; and (2) separate and distinct from a petroleum reselling or retailing business. Henry G. Meigs, Inc., 21 DOE ¶ 85,203 (1991). Clearly, these circumstances do not apply here.