Standard Oil Co. of Indiana agreed yesterday to make refunds to customers and payments to the government totaling $100 million in settlement of oil pricing violations from March 1973 to the end of last year.
The company also agreed to reduce its so-called banked costs, which could be used to justify future gasoline and propane price increased, by $180 million. And it futher committed itself to increase spending for oil and gas exploration, development and production and refinery improvements by $410 million during the next three years.
The Department of Energy, in the consent decree, said there was no evidence the violations were "willful or intentional."
The company, which markets its products under the Amoco brand, admitted no wrongdoing in the consent decree. It agreed to the settlement, it said, "to avoid further disruption of its business activities and the continuing expense of protracted, complex litigation."
The settlement was the largest so far in the investigation by DOE's special counsel Paul Bloom of price regulation compliance by the nation's 15 largest refiners. Bloom's office has identitified more than $10 billion worth of potential price violations, but few of the cases have been concluded, and the companies are challenging many of them, some in court
Amoco, prior to today, had been charged publicly with probably violating crude oil and natural gas liquids price regulations to the tune of $144 million. The bulk of the violations involved in the consent decree, which Bloom said exceed $400 million in total, concerned refinery product prices and had never been made public.
Specifically, the company agreed to refund $29 million to certain identifiable customers who bought middle distillates from it. An additional $71 million will be placed in an escrow account, which DOE will use in some undetermined way to defray "the energy costs of those on low and fixed incomes," the department said.
In place of any other specific penalty, Amoco also agreed to make a $250,000 payment to the U.S. Treasury.
The company's total capital investment and exploration and development budget for 1980, including about $223 million as a result of the settlement, will be about $3.9 billion, up about $900 million from last year. Of the additional $410 million Amoco agreed to spend over the next three years, $105 million will go for modification to its Texas City, Tex., refinery to allow it to produce more unleaded gasoline fom a given amount of crude oil.
Standard of Indiana had revenues of $20.2 billion in 1979 and profits of $1.51 billion.
In a separate proceeding yesterday, a federal judge here fined Mobil Corp. $500.00 for violating the Natural Gas Act of 1938.
Justice Department attorney Richard Sauber said Mobil stopped selling gas to an interstate pipeline in Texas in 1965 so it could divert the gas to customers within Texas and avoid federal price controls, which only applied to interstate sales. The violation which the company admitted, involved its failure to notify the government of the switch. In a civil proceeding last year. Mobil paid $18.1 million to the government as restitution for the extra profits it earned on the deal.