Transportation Charges for Imported Crude Oil

An Assessment of Company Practices and Government Regulation Gao ID: EMD-76-105 October 27, 1977

Transportation cost is a significant element in the cost of imported crude oil. Together with other costs, it is used to support price increases for regulated petroleum products.

Review of the tanker transportation charges reported by seven large oil companies showed that: (1) the Federal Energy Administration's (FEA) transportation regulations were inadequate in preventing companies receiving payments greater than their actual costs; (2) the overall reliability of the FEA transportation data was questionable due to inconsistencies and incompatibilities in the reporting systems and inadequate audits; and (3) companies reported about $26 million in transportation charges which seemed questionable or were considered as overcharges.

Recommendations

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