Case No. RF272-75586
June 29, 1999
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner: Continental Oil & Refining Co.
Date of Filing: August 7, 1989
Case Number: RF272-75586
This Decision and Order considers the Application for Refund filed by Continental Oil & Refining Co. (Continental), a firm that extracted and then resold crude oil during the period August 19, 1973, through January 27, 1981 (the crude oil price control period). Continental requests a refund from crude oil monies available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under 10 C.F.R. Part 205, Subpart V. Because this Applicant is a reseller(1) of the crude oil for which it is claiming a refund, for the reasons stated below, we will deny its claim.
Pursuant to current DOE policy, purchasers of refined petroleum products may apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. Statement of Modified Restitutionary Policy To Be Implemented In Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986). We have established refund procedures for these funds, which have been made available through consent orders entered into by the DOE and a number of firms that sold crude oil during the crude oil price control period. 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 set forth in these cases specify that to receive a refund, an applicant generally must (1) document its purchase volumes and (2) show that it was injured by alleged crude oil overcharges.
In certain refined product refund proceedings, we have established injury presumptions for certain classes of resellers and retailers. See, e.g., Marathon Petroleum Co., 14 DOE ¶ 85,269 (1986); Mobil Oil Corp., 13 DOE ¶ 85,339 (1985). Because those overcharges were confined to purchasers of refined products from a specific consent order firm, these purchasers were likely to have been placed at a competitive disadvantage relative to purchasers who were not overcharged.
In contrast, no such injury presumptions are appropriate, and none have been adopted, for resellers or retailers participating in the Subpart V crude oil refund proceeding. Because crude oil overcharges equally affected all resellers and retailers, we believe that resellers' and retailers' selling prices generally increased. See Tarricone, 15 DOE at 88,896. It would be unreasonable
to presume, therefore, that any reseller or retailer applicants in Subpart V crude oil proceedings were injured. Instead, a reseller or retailer must provide a detailed demonstration that it was unable to pass through the effects of crude oil overcharges to its own customers.(2) Because Continental is a reseller, it must therefore make this type of injury showing in order to be eligible for a refund. It has not demonstrated that it absorbed the effects of crude oil overcharges rather than passing the overcharges through to its customers. Accordingly, we cannot find that Continental suffered injury as a result of crude oil overcharges. See Borst Oil Corp., 17 DOE ¶ 85,232 (1988). Therefore, the Application for Refund must be denied.
It Is Therefore Ordered That:
(1) The Application for Refund filed by Continental Oil & Refining Co., Case No. RF272-75586, 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 29, 1999
(1)Continental engaged in extracting crude oil from the ground and then sold it to a refinery.
(2)Resellers and retailers were permitted to participate and recover monies in the "Stripper Well" refund proceedings. The "Stripper Well" refund proceedings refer to the eight escrow accounts created by the U.S. District court for the District of Kansas to implement the terms of a Settlement Agreement approved in In Re: The Department of Energy Stripper Well Exemption Litigation, M.D. L. 378, reprinted in 6 Fed. Energy Guidelines ¶ 90,509 (D. Kan. 1986). The court's action and subsequent order of disbursement issued on August 7, 1986, established a framework to refund a portion of $1.4 billion in crude oil overcharges to eight enumerated groups of petroleum product purchasers: Refiners, Retailers, Resellers, Airlines, Agricultural Cooperatives, Surface Transporters, Rail and Water Transporters, and Utilities.