Case No. RG272-00754

July 31, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Application for Refund

Name of Applicant: Philippine Government

Date of Filing: July 3, 1995

Case Number: RG272-754

This Decision and Order will consider an Application for Refund filed on behalf of the Philippine Government by the Office of the Solicitor General, Republic of the Philippines (the Solicitor General). The Application claims a refund for refined petroleum products purchased by various government-owned entities in the Philippines during the refund period (August 19, 1973 through January 27, 1981). The Philippine Government has requested a refund from crude oil 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. As explained below, we will deny this Application.

In support of its Application, the Solicitor General submitted summaries of petroleum exports from the United States to the Philippines during the refund period. We responded with a letter dated January 13, 1998, in which we explained that Section 212.53 of the Mandatory Petroleum Price Regulations states that “the prices charged for export sales, including sales to a domestic purchaser which certifies the product is for export, are exempt [from price controls].” 41 F.R. 30321 (July 23, 1976). Since export sales were exempt from price controls, there were no overcharges associated with them. Therefore, export purchases cannot form the basis of a refund claim in the crude oil refund proceeding. We requested that the Solicitor General submit documents, contracts, or other information which would show that the petroleum products the Philippine Government purchased were in fact purchased in the United States domestic market, rather than as export sales. The United States, for the purposes of petroleum price regulations, is defined as “the several states, the District of Columbia, Puerto Rico, the territories and possessions of the United States other than the Panama Canal Zone, and the Hawaiian Free Trade Zone.” 44 F.R. 3418 (January 6, 1979). Our letter of January 13 also requested that the Solicitor General provide

additional information regarding the Philippine Government’s gallonage claim.

The Solicitor General replied to our requests on July 8, 1998. It supplied the information we requested about the gallonage claim, but it did not address the question about exports. However, the letter refers to the petroleum purchases as “imports” for the Philippines, and thus as exports from the United States. Furthermore, the tables of gallonage submitted with the letter are titled, “Importation of Refined Oil For the Period 1973 to 1981.” This information leads us to conclude that the Philippine Government entities purchased petroleum products which were exported from the United States to the Philippines. As exports, these petroleum products were not part of the United States domestic market, and are therefore not eligible for a refund in this proceeding. Therefore, we will deny the Application for Refund filed on behalf of the Philippine Government.

It Is Therefore Ordered That:

(1) The Application for Refund filed by the Philippine Government is hereby denied.

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

George B. Breznay

Director

Office of Hearings and Appeals

Date: July 31, 1998