Ruling the Department of Energy had exceeded its authority to allocate fuels, a federal judge yesterday blocked a DOE order requiring Mobil Oil Corp. to sell oil and gasoline to three Midwest cooperatives.
The Energy Department had ordered Mobil to sell 2.5 million gallons of gasoline, and 500,000 barrels of crude oil to the co-ops, Farmland Industries, Land-o-Lake, Inc. and Midland Cooperatives inc.
Contending it did not have enough gasoline to supply its own dealers, Mobil sued the energy agency last month. The company claimed the coops could get the gasoline they needed on the open market, but would have to pay a high price for it.
Mobil took the dispute to court after its administrative appeals were stalled by DOE. Energy officials admitted in court that they "could not even offer an estimate as to when Mobil's request might be acted upon" because their backlog of appeals.
Issuing a temporary injunction against DOE, U.S. District Court Judge Kevin T. Duffy in New York said he found the Energy Department to "to be in excess of its authority."
Judge Duffy said he issued the injunction after reaching, "the inescapable conclusion that the application (to force Mobil to sell the fuel) was made and the orders issued to enable the three cooperatives to purchase the gas at a price well below the spot market price."
Mobil officials said they believe the ruling means the energy department has authority to allocate fuels when there is an actual shortage, but not to hold down fuel prices.