Case No. RF300-14009

November 6, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Application for Refund

Name of Petitioner: Gulf Oil Corporation /

Texas City Refining, Inc.

Date of Filing: December 5, 1990

Case Number: RF300-14009

This Decision and Order will consider the Application for Refund filed in the Gulf Oil Corporation (Gulf) overcharge refund proceeding by Texas City Refining, Inc. (Texas City). Texas City filed its Application through Michael O’N. Barron, a private attorney. The Application is based upon the applicant’s purchases of Gulf petroleum products during the Gulf consent order period (January 1, 1973 through January 27, 1981). Texas City has requested a refund from Gulf funds 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. The procedures for disbursing the Gulf funds were set forth in a Decision and Order on September 8, 1987. Gulf Oil Corp., 16 DOE ¶ 85,381 (Gulf).

In Gulf, we adopted a presumption that the alleged Gulf overcharges attributable to refined products had been dispersed equally in all sales of refined products made by Gulf during the consent order period. Gulf, 16 DOE at 88,736. We stated that, in the absence of a demonstration of a disproportionate overcharge, a claimant would be allocated a share of the consent order funds on a volumetric basis. We provided that eligible claimants would receive $.00064 per gallon of covered Gulf product purchased.(1)Id. at 88,739.

We established that a refiner, reseller, or retailer claimant generally would be required to demonstrate that it was injured as a result of its Gulf purchases; that is, that it did not pass through to its customers Gulf's alleged overcharges. However, we established a presumption that firms claiming refunds of $5,000 or

less would not be required to demonstrate that they absorbed the alleged overcharges. Id. at 88,740. We also established a presumption that firms claiming refunds of more than $5,000 but less than $50,000, excluding interest, (mid-range applicants) need only document their purchase volumes of Gulf products to be eligible for forty percent of their allocable shares. Id.

Texas City elected not to prove injury and requested a refund under the mid-range applicant presumption of injury. To demonstrate its purchase volume, Texas City submitted a computer printout from Warren Petroleum Company (a subsidiary of Gulf) which shows it purchased 69,084,942 gallons of propane from Warren Petroleum Company during the consent order period. It also submitted company records which show Texas City purchased 8,484,000 gallons of catalytic feed stock from Gulf between 1974 and 1976.

The documentation provided in support of Texas City’s propane purchases from Warren Petroleum Company is reasonable. Accordingly, Texas City is entitled to a refund for those gallons.

The company records of catalytic feed stock purchases from Gulf indicate that Texas City was a spot purchaser of catalytic feed stock. In Gulf, we stated that if a claimant made only sporadic purchases of significant volumes of Gulf product, we consider that claimant to be a spot purchaser. In most circumstances, such a claimant should not receive a refund, since it is unlikely to have experienced injury. Purchasers on the spot market tend to have considerable discretion in where and when to make purchases and would therefore not have made spot market purchases of Gulf product at increased prices unless they were able to pass through the full amount of the quoted selling price at the time of purchase to their own customers. Id. at 88,741. Texas City has not submitted evidence rebutting the spot purchaser presumption. Therefore, we will not grant it a refund for its purchases of catalytic feed stock.

We have carefully reviewed the information submitted by Texas City, and we have determined that the information required of applicants by the Gulf Decision has been submitted in this case. Id. at 88,741-42. Texas City has not demonstrated that it suffered a disproportionate overcharge as a result of Gulf's alleged overcharges. Accordingly, its allocable share of the Gulf fund will be based on the volumetric approach described above. Texas City’s allocable share is more than $5,000 but less than $50,000. Therefore, it will not be required to provide a separate, detailed demonstration that it absorbed the alleged overcharges, but will receive a refund based on the mid-range applicant presumption of injury.

Accordingly, Texas City will receive a refund amount equal to forty percent of its allocable share (the principal amount), as well as interest accrued on the principal since the consent order funds were placed in escrow.(2) The total volume approved in this Decision and Order is 69,084,942 gallons of refined petroleum products, and the refund granted is $34,542 (69,084,942 gallons x .4 x $.00125 = $34,542).

It Is Therefore Ordered That:

(1) The Application for Refund filed by Texas City Refining, Inc., is hereby granted as set forth in paragraph (2) below.

(2) 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 a total of $34,542 from the DOE deposit fund escrow account maintained at the Department of the Treasury and funded by Gulf Oil Corporation, Consent Order No. RGFA00001Z, to “Texas City Refining, Inc., c/o Michael O’N. Barron, Attorney at Law, 12417 Conway Road, St. Louis, Missouri, 63141.”

(3) The determinations made in this Decision and Order are based on the presumed validity of statements and documentary material submitted by the applicant. Any of these determinations may be revoked or modified at any time upon a determination that the factual basis underlying any Application for Refund is incorrect.

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

George B. Breznay

Director

Office of Hearings and Appeals

Date: November 6, 1997

(1)1/ This amount was derived by dividing the fund received from Gulf allocable to refined products ($42,499,566) by the estimated volume of refined products sold by Gulf from August 1973 through the date of decontrol of the relevant product (66,387,563,569 gallons). Id.

(2)2/ Each applicant's refund amount will be calculated by multiplying its approved gallonage by the total volumetric to date, which is $.00125 (principal volumetric of $.00064 + interest volumetric of $.00061 = $.00125).