Case No. RF272-88864
June 14, 1999
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner: Gibbons Company
Date of Filing: April 2, 1991
Case Number: RF272-88864
This Decision and Order will consider an Application for Refund filed by Gibbons Company (Gibbons) of Bath, Maine. Gibbons requests a refund from crude oil monies available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE). Gibbons purchased motor gasoline during the crude oil price control period and resold those products to its customers.
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 numerous firms that sold crude oil during the price control period. E.g., Berry Holding Co., 16 DOE ¶ 85,045 (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 in order 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.
Generally, a claimant is eligible for a refund equal to the number of gallons it purchased multiplied by a per gallon volumetric refund amount. The volumetric refund amount currently available is $0.0016 per gallon. We derived the volumetric refund amount by dividing the total crude oil refund monies currently available by
the total U.S. consumption of petroleum products during the period of crude oil price controls (2,020,997,335,000 gallons). This approach reflects the fact that crude oil overcharges were spread to every refiner by the Entitlements Program, 10 C.F.R. § 211.67.(1)
We have carefully reviewed all of the information submitted by Gibbons.(2) The firm has submitted gasoline figures based on the firms records that were submitted in the Gulf refund proceeding. However, this information is not sufficient to establish eligibility for a refund. See Chet's Cedarville Quicki Stop, 17 DOE ¶ 85,081 (1988). In Subpart V proceedings, applicants are generally required to prove injury, i.e., that they did not pass the overcharges through to their own customers. 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 these 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 have been adopted for resellers or retailers applying for refunds in the Subpart V crude oil refund proceeding. The Entitlements Program spread crude oil overcharges evenly throughout the petroleum industry. See n.1. Since crude oil overcharges equally affected all resellers and retailers (including Gibbons and its competitors), regardless of supplier, 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 resellers or retailers were injured by crude oil overcharges. Instead, we require a detailed demonstration that the reseller or retailer was unable to pass through the effects of crude oil overcharges to its own customers.
Although Gibbons has substantiated its gasoline purchases, it has not submitted any reasoned arguments or information indicating that it was injured by crude oil overcharges. Accordingly, Gibbons application for refund will be denied.
It Is Therefore Ordered That:
(1) The Application for Refund filed by Gibbons Company, on April 2, 1991, 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 14, 1999
(1)The Department of Energy 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, refiners were required to make transfer payments among themselves through the purchase and sale of "entitlements." Because of the manner in which the program worked, it had the effect of dispersing overcharges resulting from crude oil miscertifications throughout the domestic refining industry. See Amber Refining, Inc., 13 DOE ¶ 85,217 (1985).
(2)Interested parties were given an opportunity to submit comments regarding individual crude oil refund applications. No such comments were filed with respect to the application involved in this determination.