Peterson Oil to pay $450,000 fine for supplying 40% or more biodiesel in heating oil

In Massachusetts, Peterson Oil Service, Inc. (Peterson Oil) will pay $450,000 and improve its record-keeping processes to resolve allegations it knowingly provided state entities noncompliant heating oil in violation of its contracts with the state’s Operational Services Division, Attorney General Maura Healey announced. 

The assurance of discontinuance, entered in Suffolk Superior Court, resolves allegations that Peterson Oil violated the Massachusetts False Claims Act when it entered into two statewide contracts, covering an eight-year period, with no intention of delivering compliant heating fuel. Instead, Peterson Oil regularly delivered fuel containing significantly more biodiesel by volume than the 5 percent allowed under the contracts. 

During the course of its contracts with the state, Peterson Oil at times delivered fuel that contained 40 percent or more biodiesel by volume, more than eight times its limit allowed under the contract. Several of the state entities that purchased heating oil from the company under the contracts experienced performance issues with their heating systems because of the high biodiesel content.