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Gas Companies Ordered To Pay Back $247.2 Million For Alleged Overpricing

August 21, 1992

SAN JUAN, Puerto Rico (AP) _ The Puerto Rican government has asked three of the largest gas companies in the United States to reimburse $247.2 million obtained through alleged illegal overcharging.

The Puerto Rican Consummer Affairs Department announced Thursday that Esso Standard Oil (Puerto Rico) Co., Texaco Puerto Rico Inc., and Shell Company Puerto Rico Ltd. were liable for the return of the funds, according to a 1989 U.S. District Court of Appeals ruling.

Consumer Affairs secretary Guillermo Mojica signed an administrative order Thursday officially requesting return of the money.

The government charges that the three companies did not adhere to local Consumer Affairs Department regulations between Jan. 1986 and June 1989.

Shell and Texaco officials said they were ″surprised″ by the Puerto Rican government’s action. Esso Standard Oil did not immediately return phone calls.

According to the government, Texaco Puerto Rico would have to return $101.4 million in principal and interests accrued during the last three years, Esso Standard Oil $74 million, and Shell Company $70.9 million.

In 1986, the companies filed an injunction in the San Juan Federal Court contesting the legal and constitutional validity of the island’s price control regulations.

The gas companies now allege that the 1989 appeals court ruling is not retroactive because price controls were not in effect during the period the case was being considered. The Puerto Rican government says that price control regulations were upheld later by the U.S. Court of Appeals and the U.S. Supreme Court.

Carmen Judith Velez, public relations manager at Texaco Puerto Rico, said that the 1986 Federal Court ruling clearly demonstrates that ″there was no price regulation in effect″ from 1986 to 1989, ″so there was no possibility of overpricing.″

She reiterated that Texaco ″has acted in a responsible manner″ in establishing gasoline prices for the Puerto Rican market.

″We will review the (administrative) order, consult with our lawyers to decide what steps to take,″ she said.

Guillermo Thate, general manager of Shell Company Puerto Rico, criticized the way the government publicly requested the money. ″They should have talked to us directly,″ he said.

According to the Consumer Affairs department, the companies have the right to appeal the case in departmental hearings ″and pursue further legal action if they deem it proper,″ Mojica said

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