The Department of Energy has proposed that Crown Central Petroleum Corp. of Baltimore pay more than $33 million to gasoline and heating oil customers to compensate for overcharges and other violations of federal oil price and allocation regulations in the 1970s.
According to a DOE audit, Crown violated a number of regulations that had to do with setting prices appropriately and "improperly inflated" the amount of increased costs available for recovery in sales of gasoline by rolling in unrelated costs.
The DOE proposed that Crown refund $23.3 million plus interest to its gasoline customers and $10.6 million plus interest to heating oil customers for the alleged violations, which the DOE said occurred between August 1973 and December 1978.
Crown issued a statement yesterday saying that it believes the DOE's findings to be incorrect.
"The proposed remedial order issued by the Department of Energy to Crown Central Petroleum Corp. involves claims which Crown Central has previously informed DOE are not correct under the applicable statutes and regulations," the company's statement said.
"It is Crown's intention to contest DOE's claims both administratively and by legal action, if necessary."
The DOE charges of violations are part of a string of allegations by federal investigators over the years about Crown's marketing practices.
In 1964 the Federal Trade Commission ordered Crown to halt price-fixing practices.
In 1977 Crown, four other gasoline firms and a trade association were convicted of conspiring to fix prices between 1967 and 1974.
In 1980 the federal Council on Wage and Price Stability accused Crown of violating the administration's voluntary price guidelines by making more profit than allowed.
And the DOE charged Crown in 1978 of overcharging gasoline and heating oil customers by more than $709,000.
At the time, the agency said that the oil refiner also might have claimed an additional $3.3 million incorrectly as costs to be charged to customers in the future. Crown denied the charges then, as well.
The charges laid out in the proposed remedial order published earlier this week in the Federal Register grew out of an examination of issues that were raised in the earlier notice of probable violation.