Oil companies and resellers may have overcharged consumers as much as $1.3 billion in 1979, and perhaps more in 1980, by hiding price-controlled oil from the government and then selling it as uncontrolled oil at much higher prices, according to an Energy Information Administration report obtained by Energy User News.
In 1979 about 214,000 barrels a day of cheap price-controlled oil disappeared from oil company reports to the government on the way from producer to refiner. AT the same time oil companies reported producing 205,000 barrels a day more high-priced 'stripper oil' than had actually been produced. 'Stripper' oil comes from low-yielding wells, and before the deregulation of the oil industry was exempt from price controls.
The EIA report said only a small portion of the oil shifted from the price-controlled category to the stripper category could be accounted for through data errors. Instead, it suggests, oil companies and resellers probably illegally manipulated the government's oil price-control program.