Case No. RD326-00323

September 29, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Motion for Discovery

Application for Exception

Name of Petitioner:Tesoro Petroleum Corporation/Simmons Oil Corp.

Dates of Filing: December 2, 1991

June 26, 1995

Case Numbers: RF326-323

RD326-323

On October 12, 1990, the Office of Hearings and Appeals of the Department of Energy established refund procedures for purchasers of refined petroleum products from Tesoro Petroleum Corporation (Tesoro). Tesoro Petroleum Corp., 20 DOE ¶ 85,665 (1990) (Tesoro). The Tesoro determination implements a process for returning funds collected from Tesoro pursuant to a consent order that it entered into on January 23, 1989, to purchasers of Tesoro products who demonstrate that they were injured as a result of Tesoro's alleged regulatory violations. On December 2, 1991, Simmons Oil Corporation (Simmons) filed an application for refund in the Tesoro refund proceeding. On December 9, 1992, we issued a Proposed Decision and Order to Simmons which tentatively determined that the majority of its refund claim should be denied. The firm filed a Statement of Objections to the Proposed Decision, and on June 26, 1995, filed a Motion for Discovery in which it seeks additional information relevant to its claim from Tesoro. As set forth below, we shall grant Simmons' refund claim in part, and we shall deny its Motion for Discovery.

I. Background

A. The Tesoro Special Refund Proceeding

In the Tesoro proceeding, the Department of Energy distributes funds received pursuant to a January 23, 1989 consent order. That consent order resolved allegations that Tesoro had violated the Mandatory Petroleum Price and Allocation Regulations in its domestic sales of crude oil and refined petroleum products between January 1, 1973, and January 27, 1981.

Evaluating applications in the Tesoro proceeding involves both an allocation of an appropriate portion of the consent order fund to each applicant and an evaluation of economic harm or injury suffered by that applicant. See Tesoro, 20 DOE at 89,526-527. To determine the portion of the fund to be allocated to each claimant, we assumed that Tesoro's overcharges, if any, were distributed equally over every gallon of regulated products sold by Tesoro during the consent order period, and we allocated the consent order monies by dividing the value of the fund by the

total volume of Tesoro's sales of covered products during that period. Tesoro, 20 DOE at 89,526- 527. This calculation produces a “volumetric factor” of $0.000801 per gallon. A claimant must also demonstrate that it was injured, i.e., that it absorbed rather than passed on to its customers, the Tesoro overcharges. Tesoro adopted presumptions of injury under which a reseller of Tesoro products may receive up to the greater of $5,000 or 40 percent of its allocable share without providing a demonstration of injury.

Nonetheless, we recognized in Tesoro that the impact of Tesoro's alleged overcharges on a particular firm may have been greater than the volumetric refund amount. Accordingly, we stated that if a claimant can demonstrate that it sustained a “disproportionate share” of Tesoro's alleged overcharges, it may receive a refund calculated using a per gallon refund greater than the "volumetric factor." Id. at 89,526. Simmons is attempting to make such a showing.

B. Simmons' Refund Claim

Simmons has documented purchases of 25,183,557 gallons of Tesoro motor gasoline during the consent order period. However, Simmons is seeking a refund based upon a claim of disproportionate overcharge. Simmons bases this claim upon its purchase from Tesoro of 2,100,000 gallons of motor gasoline, negotiated by Simmons on May 25, 1979, for delivery in two lots, on July 27 and August 1, 1979. The price Tesoro charged Simmons for this motor gasoline was $1.321 per gallon. However, between negotiating the purchase and the delivery date, the market price of motor gasoline dropped precipitously, and Simmons resold the product to Texaco at $0.75 per gallon, a loss of $0.571 per gallon. In its original application, Simmons alleged that after the decline in market prices, Tesoro was able to negotiate a reduction in the price that it had paid to Apex Oil Company (Apex), the firm that sold Tesoro the motor gasoline that it resold to Simmons. Simmons contends that the price regulations required Tesoro to have passed the benefit of this reduced purchase price on to Simmons, but Tesoro did not do so. Simmons claimed that it lost $1,199,100 (2,100,000 gallons x $0.571 loss per gallon) in this transaction.

C. The Proposed Decision and Order

On December 9, 1992, we issued a Proposed Decision and Order to Simmons which tentatively determined that its disproportionate refund claim should be denied, and a refund of $5,000, plus interest, be granted to Simmons based upon the presumptions of injury for resellers of Tesoro products. The primary basis for this tentative determination was Simmons' failure to demonstrate that Tesoro had violated the regulations applicable to this transaction. We noted in the Proposed Decision that there would have been nothing necessarily improper about an attempt by Tesoro to mitigate its economic position by renegotiating the price it paid to Apex for the motor gasoline, and that the central issue for the Simmons claim is whether Tesoro was required by the regulations to pass the benefit of any renegotiated price through to Simmons. Under the refiner price rule which existed at that time, refiners such as Tesoro would generally be required to include such a cost reduction in the refiner price formula and either apply the reduction to reduce its banks of unrecovered costs or pass the benefits of a renegotiated cost through to all of its customers. See 10 C.F.R. § 212.83.

However, refiners were permitted to establish separate marketing entities to resell petroleum products. The pricing practices of an affiliated marketing entity that exercised independent pricing authority and purchased no more than five percent of its sales volume from the associated refiner would instead be governed by the regulations applicable to resellers. 10 C.F.R. § 212.91. If Simmons had purchased the motor gasoline from such an entity, then Tesoro would have been required to pass any reduction it had received (provided it was charging its maximum lawful markup) in the cost of a cargo lot to the firm purchasing that cargo lot.

The Proposed Decision noted that the record contained no evidence on whether Tesoro had an affiliate that was subject to section 212.91. Accordingly, we concluded in the Proposed Decision that Simmons had not demonstrated that the regulations required Tesoro to pass any price reduction negotiated with Apex on to Simmons. In addition, we noted that in any case the appropriate measure of the injury to Simmons caused by Tesoro's practices would be no greater than the amount, if any, of the price reduction that Tesoro negotiated with Apex, not Simmons' purported loss on the transaction.

The Proposed Decision also noted that Simmons' cargo lot purchases appeared to be spot purchases. In the Tesoro decision, we adopted a rebuttable presumption, utilized in most refund proceedings, that firms making spot purchases were not injured as a result of those purchases and are therefore not eligible for a refund. Among the factors we consider in determining whether the spot purchaser presumption has been rebutted is whether the purchases were made to meet the needs of the applicant's customers, and there was no evidence in the record on this issue.

D. Simmons' Statement of Objections

On April 14, 1993, Simmons filed a Statement of Objections to the Proposed Decision and Order. Information submitted by Simmons confirms that on June 1, 1979, Tesoro established an entity, Tesoro Marketing, that met the requirements of 10 C.F.R. § 212.91. With respect to the transaction at issue in this case, Simmons claims that Tesoro ultimately obtained the motor gasoline it delivered to Simmons in July and August 1979 at a cost that was 6.5 cents per gallon below the price it expected to pay Apex for the gasoline when it negotiated the contract with Simmons on May 25, 1979. Simmons asserts that this evidence establishes overcharges of $136,500 (2,100,000 gallons x $0.065 per gallon).(1) To rebut the presumption of non-injury for spot purchasers, Simmons contends that it made these spot purchases to meet the needs of its customers.

E. Simmons' Discovery Request

Much of the information that Simmons submitted in support of its Statement of Objections was obtained through discovery it had obtained in connection with a suit it had filed on July 5, 1994, against Tesoro in the United States District Court for the District of New Mexico. The suit was based in substantial part upon the transactions at issue in this refund proceeding. Relief was denied by the District Court on statute of limitations grounds and that denial was affirmed upon appeal. Simmons Oil Corp. v. Tesoro Petroleum Corp., No. 95-1433 (Fed Cir. June 13, 1996). Material disclosed by Tesoro during the litigation might have been useful in this proceeding, but Tesoro obtained a protective order from the District Court that prohibited, inter alia, Simmons from making any further voluntary disclosure of information obtained from Tesoro to this Office.

In its Motion for Discovery, Simmons asks that we direct Tesoro to (1) provide to this Office the information that it has already provided to Simmons but which Simmons is prohibited by the protective order from submitting directly to this Office, and (2) direct Tesoro to respond to those portions of its discovery requests which were pending at the time the District Court dismissed its suit. Tesoro strongly opposes the discovery motion. The firm maintains that granting the motion would (i) violate the consent order between DOE and Tesoro, (ii) circumvent the district court's protective order, and (iii) serve only to harass Tesoro.

II. Analysis

A. Establishment of Tesoro Marketing

The Proposed Decision noted that under the refiner price rule, refiners would generally be required to include a cost reduction in the refiner price formula and either apply the reduction to reduce its banks of unrecovered costs or pass the benefits of a renegotiated cost through to all of its customers. See 10 C.F.R. § 212.83. Under such circumstances, even if Simmons established that Tesoro had renegotiated the price it paid Apex for the gasoline sold to Simmons, it would not mean that Simmons had been overcharged. An exception to this general rule would be where the refiner had established an independent marketing authority that met the requirements of 10 C.F.R. § 212.91 and elected to use separate inventory treatment for its cargo lot transactions. Under these circumstances, each transaction essentially stood on its own and a reduction in cost would generally have had to be passed through to the purchaser.

Simmons has submitted evidence that Tesoro did establish Tesoro Marketing, an entity that met the requirements of 10 C.F.R. § 212.91. However, Tesoro Marketing was not established until June 1, 1979, after Simmons negotiated the purchase on May 25, 1979. Tesoro transferred the Simmons contract to Tesoro Marketing after that entity was created, and Tesoro Marketing delivered the motor gasoline to Simmons. We find no evidence that either this Office or any other DOE or FEA office ever addressed the issue of cargo lot pricing when an independent marketing entity was established between negotiating the contract and delivery of the product. Consequently, Simmons points to nothing which favors its interpretation of the relevant regulation. Moreover, it is generally inappropriate in the context of a refund proceeding to consider novel issues of regulatory construction. Under these circumstances, we are not convinced that Tesoro was entitled to use separate inventory pricing for this transaction, and consequently, we are not convinced that Tesoro was obligated to pass any reduction in its cost of the gasoline on to Simmons.(2)

B. Alleged Renegotiation of Purchase Price

Even if we assume that the Simmons transaction was subject to separate inventory treatment, Simmons has not demonstrated that Tesoro violated the price regulations. The crux of Simmons' disproportionate overcharge claim is that Tesoro was able to renegotiate with Apex, the firm that sold Tesoro the gasoline that was resold to Simmons, for a lower price after the gasoline market dropped in the Summer of 1979. The basis for this claim is an affidavit from the owner of Simmons, Jerry Simmons. In that affidavit, Mr. Simmons recounts a conversation that he had with Neal Chandi, a former Tesoro official, who allegedly stated that Tesoro had renegotiated its price with Apex. However, the evidence does not support Mr. Simmons' recollection. During the court proceeding, Mr. Chandi executed an affidavit in which he denied ever telling Mr. Simmons that Tesoro had renegotiated its contract with Apex. Other Tesoro and Apex employees also indicated that there was no renegotiation. See Affidavit of Ronald Spath at 3-4; Affidavit of Raymond Gibson at 5-6; Affidavit of Gary Parker at 2.

Moreover, the documentary evidence in the record, although incomplete, tends to confirm that no renegotiation took place. The record indicates that on May 24, 1979 Tesoro purchased 300,000 barrels of motor gasoline for delivery in July from Apex for $1.225 per gallon (Invoice P- 412). On May 25, 1979, Tesoro purchased another 300,000 barrels from Apex at $1.29 per gallon (Invoice P-416).(3) Also on May 25, Tesoro sold 50,000 barrels to Simmons at $1.321 per gallon (Invoice S-623). An analysis prepared at the time indicated that the Simmons sale was matched to the product obtained pursuant to Invoice P-416, and Tesoro's selling price to Simmons was based upon its cost for that purchase of $1.29 per gallon. See "Economics" (5/25/79). The purchase reflected by Invoice P-412 was destined for other customers (Supreme and Englehard). See "Economics" (5/24/79). However, when it came time to deliver the product, the Simmons purchase was matched with Invoice P-412. See Bulk Movement Authorizations (July 17 and July 27, 1979). The change in the sale to which the Simmons purchase was matched is unexplained, but may have been made to accommodate Simmons which was having trouble locating a purchaser for the gasoline. See Telexes dated July 12 and July 27, 1979; Affidavit of Ronald Spath at 2; Affidavit of Raymond Gibson at 6.

In sum, as originally negotiated, Tesoro calculated a lawful selling price to Simmons, based upon a purchase from Apex at $1.29 per gallon. However, delivery was actually made from product that Tesoro acquired from Apex at a lower cost ($1.225 per gallon). Tesoro's change in the purchase to which the sale to Simmons was matched did not violate the price regulations. It constituted an exchange of the product originally designated to go to Simmons for the product that was actually delivered to the firm.(4) The regulations provided with respect to exchanges that:

The unit cost of a covered product received by the seller pursuant to an exchange shall be deemed to be the weighted average unit inventory cost of that product used by the seller to determine its lawful price on the date the product is received by the seller.

10 C.F.R. § 212.96. Thus, pursuant to this exchange provision, the cost of the product that Tesoro actually delivered to Simmons was deemed to be the cost of the cargo lot which Tesoro had originally intended to deliver to Simmons, i.e., $1.29 per gallon. It appears from the record that the 3.1 cents per gallon markup on this sale was legal. Consequently, Simmons has not demonstrated that Tesoro's treatment of these transactions violated the applicable price regulations.

C. Spot Purchases

Although Simmons had regularly purchased moderate volumes of motor gasoline from Tesoro, the firm began to purchase large cargo lots from Tesoro during 1979 (of which the transactions discussed above are one example). These cargo lot transactions did not reflect Simmons' previous relationship with Tesoro and were not part of its base period allocation. We concluded in the Proposed Decision that these cargo lot transactions constituted spot purchases. As noted above, there is a presumption that firms should not receive refunds for their spot purchases, since they are seldom injured by spot purchases as they have discretion in whether to enter into the transactions. One of the critical factors that we consider in determining whether an applicant has rebutted the spot purchaser presumption is whether the purchases were made to meet the needs of the firm's base period customers. See Saber Energy, Inc./Mobil Oil Corp., 14 DOE ¶ 85,170 (1986); Murphy Oil Corp./Village Store, 20 DOE ¶ 85,713 (1990).

In response, Simmons included with its Statement of Objections an affidavit by Jerry D. Simmons, in which Mr. Simmons states:

Simmons was desperately trying to protect itself and its customers from what it, and many others, perceived to be severe shortages and skyrocketing prices. . . . [W]e hoped to be able to relieve the shortages existing on the West Coast and Arizona, where we were unable to secure deliveries of gasoline, by exchanging, trading or otherwise taking advantage of the gasoline that we purchased on the Gulf Coast from Tesoro.

Affidavit of Jerry B. Simmons ¶ 4 (April 10, 1993). If true, this statement implies that Simmons did make the purchases to meet its customers' needs. In addition, Simmons has submitted evidence to demonstrate that in 1979, the firm was having difficulty obtaining sufficient supplies of motor gasoline at reasonable prices to satisfy its customer's needs.

The record does not, however, support Simmons' claim that its cargo lot purchases were intended to satisfy its customers needs. With few exceptions, Simmons' cargo lot purchases did not go to its base period customers, but were in fact resold in cargo lots to other, non-base period purchasers. Simmons also elected to use separate inventory treatment for these purchases. Affidavit of Jerry B. Simmons (December 7, 1998). This treatment means that the purchases were intended to benefit only Simmons, through resale profits, and not to meet the needs of the firm's base period customers. Moreover, with respect to the transactions for which Simmons claimed a disproportionate overcharge, Mr. Simmons stated in an affidavit that "Originally the sale was with a party other than Texaco." Affidavit of Jerry B. Simmons (January 15, 1992) (emphasis added). The party to which Simmons originally intended to sell this motor gasoline is not identified, but there is no indication that it was a base period purchaser. Thus, there was never any intent that these transactions be use to satisfy base period supply obligations.

We believe it inappropriate to approve refunds for such discretionary transactions. We have consistently followed this policy. Simmons entered into these transactions only when it thought that it could realize a profit. They were speculative in nature and were intended to benefit Simmons only. The refund process is not intended to indemnify firms who engaged in discretionary, speculative transactions for their own benefit. Accordingly, we shall exclude cargo lot purchases (other than several that appear to have gone into Simmons' general inventory) from our calculation of Simmons' refund.

D. Calculation of Refund

Even though Simmons has failed to show that it sustained a disproportionate overcharge, the firm would be entitled to a refund of its full volumetric amount (rather than the 40 percent that it is eligible for under the medium-range presumption of injury) if it could show that it was injured by the alleged overcharges, i.e., that it did not pass them through to its customers.(5) As noted above, a disproportionate overcharge claim also requires that the applicant show that it was injured. Generally, an injury showing requires a claimant to demonstrate (1) that it maintained banks of unrecovered increased product costs large enough to justify the amount claimed, and (2) that market conditions forced it to absorb the alleged overcharges. Simmons has submitted calculations to show that it had sufficient banks of increased product costs ($9 million) to justify the refund it seeks.

To determine the degree to which market conditions forced an applicant to absorb the alleged overcharges, we apply a three part competitive disadvantage analysis that has been upheld by the courts. See Behm Family Corp. v. DOE, 903 F.2d 830 (Temp. Emer. Ct. App. 1990); Atlantic Richfield Co. v. DOE, 618 F. Supp. 1199 (D. Del. 1985). Under this methodology, we infer that purchases made at above average market prices indicate that the firm was unable to pass through the alleged overcharges. Conversely, we infer that purchases made at prices below the market average placed a firm at a competitive advantage and did not injure the firm. The analysis produces three measures which the OHA uses as guidelines in determining the claimant's level of injury. The first measure, "gross excess cost," is the sum of the amounts by which an applicant's monthly purchase costs exceeded the market average. The second measure, "net excess cost," equals an applicant's gross excess cost minus the sum of the amounts by which its purchase costs were below the market average in other months. This measure provides an indication of the cumulative impact of the alleged overcharges, balancing the adverse effect of the comparatively expensive purchases against the positive effect of comparatively inexpensive purchases. The third measure, the "above-market volumetric share," is the number of gallons purchased at prices which exceed market prices multiplied by the volumetric factor. This measure is indifferent to the magnitude of the excess costs incurred, accounting only for the number of gallons of uncompetitively priced product purchased by the applicant. We consider all of these indicators of competitive disadvantage in determining whether, and to what extent, an applicant was injured by its purchases, thereby enabling us to calculate an appropriate refund amount. See Texas Oil and Gas Corp./Gulf Oil Corp., 13 DOE ¶ 85,135 (1985); see also Texaco Inc./Oakwood Oil Co., 22 DOE ¶ 85,262 (1993).

In making this analysis, we compare for each month an applicant's product cost with the prevailing market prices for that product in the same geographical area.(6) We have previously relied on Platt's Oil Price Handbook and Oilmanac (Platt's) as the source of regional average market price data. We shall rely upon Platt's here. Most of Simmons business was conducted in the states of Texas and Kansas. The closest location to Kansas for which Platt's has pricing data is Oklahoma. The only location in Texas for which Platt's provided prices was Houston, and it began reporting prices for that location only in 1979. Oklahoma is closer to many locations in Texas than is Houston. Under these circumstances we believe the Platt's price reports for Oklahoma provide the most accurate basis of comparison.

The results of the competitive disadvantage analysis (which excludes cargo lot transactions) are detailed in the Appendix to this Decision and Order and are summarized below:

Measure of Simmons Competitive Disadvantage

Full Volumetric Share $12,668

Gross Excess Costs $2,000,547

Net Excess Costs $1,959,040

Above Market Price Volumetric Share $10,991

While none of these figures is intended to represent an absolute measure of the injury suffered by the firm, taken together they reveal whether an applicant was placed at a competitive disadvantage by its refined petroleum product costs during the period in which it was allegedly being overcharged. Simmons' gross excess costs and net excess costs were many times the firm's full allocable share of the Tesoro consent order fund. Moreover, 87 percent of Simmons' purchases from Tesoro were made at above-market prices. Collectively, the measures used in the competitive disadvantage analysis strongly suggest that Simmons experienced a substantial and consistent competitive disadvantage as a result of its purchases of motor gasoline from Tesoro. See, e.g., Enron Corp./Odessa L.P.G. Transport, Inc., 24 DOE ¶ 85,038 at 88,106 (1994); Texaco Inc./Oakwood Oil Co., 22 DOE ¶ 85,262 (1993); Marathon Petroleum Co./Acme Oil Co., 17 DOE ¶ 85,634 (1988); Conoco Inc./Power Pak Co., 17 DOE ¶ 85,016 (1988).

Accordingly, we believe that Simmons' injury was of sufficient magnitude to justify a refund of the entire volumetric amount for its gasoline purchases, other than gasoline purchased in cargo lot quantities. Consequently, we will approve a volumetric refund for Simmons for 15,814,772 gallons. The principal amount of Simmons' refund is $12,668 (15,814,772 gallons x $0.000801 per gallon). In addition, the firm will receive a proportionate share of the interest that has accrued on the consent order funds. The total refund granted to Simmons is $22,408 ($12,668 principal plus $9,740 interest).

E. Motion for Discovery

In it Motion for Discovery, Simmons seeks additional information from Tesoro concerning how Tesoro priced its cargo lot purchases. DOE regulations do not specifically authorize discovery in Subpart V proceedings, and we have found that requests for discovery are not appropriate where there is no indication that they will yield relevant evidence that is unavailable elsewhere. Cf. Christian Haaland A/S, 17 DOE ¶ 85,439 at 88,464 (1988); Copper Range Co., 18 DOE ¶ 85,431 at 88,692-93 (1988). Given the analysis above, we believe it highly unlikely that additional information from Tesoro would alter the outcome of this case. Under these circumstances, we shall deny the Motion for Discovery. See Gulf States Asphalt Co., 18 DOE ¶ 85,154 at 88,250 (1988) (no factual issues critical to the refund claim in dispute).

It Is Therefore Ordered That:

(1) The Application for Refund filed by Simmons Oil Corporation on December 2, 1991, is hereby granted as set forth in Paragraph (3) below.

(2) The Motion for Discovery filed by Simmons Oil Corporation on June 26, 1995, is hereby denied.

(3) The Director of Special Accounts and Payroll, Office of Departmental Accounting and Financial Systems Development, Office of the Controller of the Department of Energy, shall take appropriate action to disburse from the DOE deposit fund escrow account maintained at the Department of Treasury, Product Tracking-C, 999DOE035W, $22,408 ($12,668 principal plus $9,740 interest) payable to Simmons Oil Corporation and mailed to:

Simmons Oil Corporation

? The Baller Herbst Law Group

1820 Jefferson Place, N.W., #200

Washington DC 20036

(4) The determinations made in this Decision and Order are based upon the presumed validity of statements and documentary material submitted by the applicants. The determinations may be revoked or modified at any time upon a finding that the factual basis underlying any of the Applications for Refund is incorrect.

(5)This is a final Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date:September 29, 1999

APPENDIX

SIMMONS OIL CORPORATION

COMPETITIVE DISADVANTAGE ANALYSIS

Date

Gallons

Price/

Gallon

Platt's

Price

Above/

(Below)

Market

Net Excess Cost

Gross

Excess

Cost

Above

Market

Volume

1976

October

316,000

.4000

.3817

0.0183

5,783

5,783

316,000

November

22,703

.4000

.3813

0.0187

425

425

22,703

1977

March

1,971,788

.4653

.3950

0.0703

138,617

138,617

1,971,788

April

133,641

.5122

.4027

0.1095

14,634

14,634

133,641

May

612,708

.5156

.4054

0.1102

67,520

67,520

612,708

June

578,739

.4842

.4085

0.0757

43,811

43,811

578,739

July

512,574

.5197

.4100

0.1097

56,229

56,229

512,574

August

419,154

.5104

.4082

0.1022

42,838

42,838

419,154

September

784,612

.4952

.4075

0.0877

68,810

68,810

784,612

October

806,382

.4928

.4075

0.0853

68,784

68,784

806,382

November

573,557

.4198

.4075

0.0123

7,055

7,055

573,557

December

400,793

.4515

.4075

0.0440

17,635

17,635

400,793

1978

January

230,252

.4289

.4050

0.0239

5,503

5,503

230,252

February

187,222

.5267

.4025

0.1242

23,253

23,253

187,222

March

138,049

.5267

.3963

0.1304

18,002

18,002

138,049

April

289,775

.6033

.4019

0.2014

58,361

58,361

289,775

May

556,445

.6183

.4132

0.2051

114,127

114,127

556,445

June

94,982

.6633

.4234

0.2399

22,786

22,786

94,982

July

40,325

.6633

.4317

0.2316

9,339

9,339

40,325

August

128,596

.7183

.4423

0.2760

35,492

35,492

128,596

September

495,227

.7383

.4457

0.2926

144,903

144,903

495,227

October

1,211,601

.5954

.4450

0.1504

182,225

182,225

1,211,601

November

65,539

.7829

.4520

0.3309

21,687

21,687

65,539

1979

February

135,200

.4834

.4850

(0.0016)

(216)

March

75,487

.4834

.4966

(0.0132)

(996)

April

245,727

.5301

.5325

(0.0024)

(590)

May

109,870

.4312

.5794

(0.1482)

(16,283)

June

235,524

.5928

.6135

(0.0207)

(4,875)

July

41,591

.6431

.6436

(0.0005)

(21)

August

126,428

.6693

.6970

(0.0277)

(3,502)

September

446,280

.7173

.7348

(0.0175)

(7,810)

October

430,310

.7434

.7589

(0.0155)

(6,670)

November

247,103

.7675

.7697

(0.0022)

(544)

December

1,050,000

1.1610

.7815

0.3795

398,475

398,475

1,050,000

1980

January

1,050,588

1.0882

.7775

0.3107

326,418

326,418

1,050,588

March

1,050,000

.9460

.8433

0.1027

107,835

107,835

1,050,000

TOTAL

15,814,772

1,959,040

2,000,547

13,721,252

(1)Simmons has claimed that Tesoro may have overcharged it on other cargo lot purchases. Simmons has not, however, submitted any evidence to support this claim.

(2)We note that the record indicates that Tesoro has substantial banks of unrecovered product costs. There is no reason to believe that Tesoro could not have recovered a portion of its banks in its sale of motor gasoline to Simmons.

(3)The record also contains invoices and an "economic analysis" for Invoice P-416 that indicate it was for 50,000 barrels. The reason two invoices exist with the same number for different volumes is not explained. However, this would not alter our analysis of Simmons' refund claim.

(4)Tesoro used separate inventory treatment for its cargo lot transactions. Under such treatment, each cargo lot purchase was independent of its other cargo lot purchases, and transactions involving cargo lots would generally have been treated in a manner analogous to transactions between separate firms.

(5)In the Proposed Decision, we noted that additional information was necessary for us to determine if Simmons had been injured by Tesoro's overcharges on its non-cargo lot transactions. Although the firm did not address this matter in its Statement of Objections, information submitted by the firm during the course of this proceeding is sufficient for us to make this calculation.

(6)Generally, we conduct a separate analysis for each grade of gasoline. The information in the present record, however, aggregates all grades of gasoline. Under these circumstances, we have used Platt's prices for premium gasoline (which would be least favorable to Simmons since regular motor gasoline market prices would show a greater competitive disadvantage). As noted below, even using premium prices as a basis for comparison, the firm suffered a significant competitive disadvantage.