Exxon and Arco: Government Demands $240 Million for Gasoline Overpricing

The Exxon Company overpriced gasoline sold in the U.S. between September and December, 1974, by reducing the octane level of the gasoline without lowering the price, according to the U.S. Department of Energy [DOE]. The DOE is asking that Exxon pay $70.2 million-approximately the amount of overcharges paid by U.S. consumers-into the U.S. Treasury.

The DOE's claim against Exxon was made in early June in the form of a Proposed Remedial Order (PRO), which is "the most important step in the internal administrative litigation process," according to a DOE spokesperson.

Exxon has 60 days to appeal the order within the DOE. If Exxon's appeal is denied, the case could become grounds for litigation.

"Exxon responded to these allegations in 1978 and had made a reduction in production costs," claimed Bill Smith, a spokesperson for Exxon. "The DOE charges would have required Exxon to pass through its cost savings twice, therefore the charges are insupportable," he said. The DOE maintains that it has not found any evidence to substantiate Exxon's claim.

In another Proposed Remedial Order, the DOE found that the Atlantic Richfield Corporation (Arco) "overstated the costs of its crude oil by approximately $166,978,282 for the period August 1973 o through December 1980" on oil transferred by Arco's International Division to its Products Division.

Arco has asked for an extension to the 60-day time limit for returning its response to the DOE, a department spokesperson said, "but the company feels very strongly about this and will probably fight it to the end."