AG puts renewed scrutiny on Peterson Oil over biodiesel, reaches additional settlement
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Peterson Oil in Worcester
The Office of Massachusetts Attorney General Andrea Campbell earlier in January reopened a case involving Peterson Oil Service Inc. of Worcester in which the oil company delivered heating fuel to the state containing more than the acceptable amount of biodiesel.
In 2021, Peterson Oil agreed to pay $450,000 and agreed to maintain records demonstrating compliance with the terms of its ongoing contract with the state to resolve the allegations it violated state contracts by delivering heating fuel containing more than 5 percent biodiesel.
As part of the reopening of the case, Peterson Oil and the attorney general’s office during the week of Jan. 16 signed a new addendum to the 2021 agreement, according to information provided by the AG’s office. Peterson Oil agreed to pay $5,000 to resolve the disputed claim the company did not maintain adequate records. Peterson agreed to hire an independent compliance monitor approved by the AG’s office at Peterson’s expense to conduct periodic record audits for a three-year period.
The attorney general’s office found Peterson entered into two statewide contracts for fuel delivery to state and municipal entities with no intention of delivering compliant heating oil. The AG claims Peterson delivered heating fuel with more biodiesel than allowed. According to the AG, fuel delivered contained more than 40% biodiesel by volume, which is eight times the limit allowed under the contract.
Peterson is also in the midst of a class action lawsuit, which was certified on Dec. 12 by a Worcester Superior Court judge. The case was filed in 2019 by nine customers of Peterson Oil and alleges the company sold and delivered a mix of heating oil that caused damage to heating systems and burned at a less efficient rate. The lawsuit alleges more than 15,000 customers could have been affected by the practice.
The lawsuit accuses Peterson Oil and its then executives Howard Peterson Jr., Sharon Peterson and Kristen Peterson Halus of promising heating oil and instead selling fuel diluted with biodiesel. It claims Peterson Oil began adding biodiesel fuels to its heating oil in 2012 and began delivering oil with blends close to 20% and from 2015 to 2021 Peterson’s average biodiesel blend was 38%.
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