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DOCUMENT RESUME// e
04004 - [B3014289]
Transportation Charges for Imported Crude cil: An Assessment of
Company Practices aud Government Regulation. END-76-105;
B-178205. October 27, 1977. Released November 4, 1977. 40 pp. +
2 appendices (7 pp.).
Report to Rep. Harley 0. Staggers, ChaSrmanx House Committee on
Interstate and Foreign Coaserce; by Botert r. Keller, Acting
Comptroller General.
Issue Area: Energy: Energy Pricing (1604); Energy: Effect of
Federal Financial Incentives, Tax Policies* and Regulatory
Policies on Energy Supply (1610).
Contact: Energy and minerals Div.
Budget Fanction: Natural Resources, unTironment, and Energy.
Energy (305); Commerce and Transpcrtati.: later
Trpansportation (406).
Organization Concerned: Department of the Treasury; Federal
Energy Administration.
congressional Relevance: House Committee on Interstate and
Foreiga Commerce.
Authority: Emergency Petroleum Allocation Act of 1973 (P.
93-159). Economic Stabilization Act of 1970 (P.L. 91-379).
Federal Energy Administration Act of 1974 (P.L. 93-275).
Energy Policy and Conservation Act of 1975 (P.L. 94-163).
Transportation cost I-- a significan. qlalevt in the
cost of imported crude oil. Together with other costs, it is
used to support price increases for regulated petroleum
products. Findings/Conclusions: Review of the tanker
transportation charges reported by seven large oil ccmpanies
showed that: the Federal Energy Administration's (?EA's
transportation regulations were inadequate in preventing
companies receiving payments greater than their actuel costs;
the overall reliability of the FEAls transportation data was
questionable due to inconsister'.iss and incompatibilities in the
reporting systems and inadequate audits; and rcpanies reported
about $26 million in transportation charges which seemed
ques.icnable or were considered as overcharges.
Recommendations: The SecretoTy of the Department of Energy
should take the following actions with regard to regulatory
compliance, administration, and systems support: (1) verify that
the oil companies have reooited cost adjustments for uncovered
overcharges; (2) assure proper implementation of new
trarsportation regulations; (3) assure that all companies
applyinc, for exceptions to standard transportation accounting
methods demonstrate that the company method results in costs no
qreater than those resuiting from the use Lf the published
Average Freight Rate Assessment as commonly applied; (4) insure
that reviews of imported crude oil transportation charges are of
sufficient scope to assure continued compliance with applicable
requlations; (5) evaluate the Average Ireight Bate ALsessment](ViewImageLocal?handle=hein.gao/gaobaawel0001&div=1&collection=&method=preview&ext=.png&size=3)