the monthly allocation fraction. The allocation fraction is the quotient of total available fuel (allocable supplies) divided by the total requirement based on allocation levels allowed for the end-users. If sufficient products are available, the allocation fraction will be 1.0 or more; if a shortage exists, the allocated fraction will be less than 1.0 and available supplies will be distributed to the various levels of the end-users with pro rata reduction except for those end-users designated as agricultural production. There will be different allocation fractions for different suppliers, although the differences will be reduced after crude oil is allocated on a pro rata basis among refineries. The allocation levels of end-users are described under each product in later sections. Allocation may not exceed the level of 100% unless approved by FEO. Excess must be submitted to FEO and appropriate FEO Region via certified mail. FEO may direct distribution of such excesses within 15 days; after this time, the supplier may distribute the excess volumes. 4. STATE SET-ASIDE SYSTEM The state set-aside system requires reporting by all refiners, importers and other prime suppliers (the supplier that makes the first sale of a product into the state for consumption), of the volumes of products available in each state in the forthcoming month. This reporting of allocated products includes motor gasoline, middle distillates, residual fuel oil and propane. These suppliers report monthly to the FEO and to the state, the total quantity of fuel expected to be available in each state which the supplier is obligated to serve. The state set-aside program provides that a portion of the fuel available in the state be reserved for control by the state office. The state set-aside percentage is determined by the FEO and applied to the total supply offered by each supplier for "first sale" in the state. The State exercises complete discretion over set-aside products within the general provisions of the Emergency Petroleum Act of 1973, and over the approval or disapproval of allocations to end-users or wholesale purchasers for hardships. State set-asides have been established for propane, middle distillates, motor gasoline and residual fuel oil (except as used for electric power generation and bunker fuel). Refiners, importers, and other prime suppliers will be required to allocate monthly their total available supplies, less that reserved for the state set-aside. Refiners, importers, and other prime suppliers will also be required to distribute fuels from the state set-aside as directed by the state. Those who receive allocations from the state set-aside will be directed to their customary suppliers, where practicable, or to other suppliers to receive the allocated fuels. Copies of allo cation orders from the state will be provided to those receiving the allocation, and to the regional or local offices of the prime suppliers. This authorization must be presented to the supplier. To facilitate assignments, the purchaser may be requested to identify either (a) his present suppliers or (b) if he does not presently have suppliers, the names of two logical suppliers he has contacted in attempts to obtain supplies. The State Office may issue allocation orders against the state set-aside. The total of such orders issued to any refiner, importer, or prime supplier, may not exceed the amount he reported to the State for that month under the setaside requirement. Under the January 15, 1974 regulations, any portion of the state set-aside unused at the end of the month may not be carried forward by the state office, but will be automatically added to available supplies for the following month of the importer, refiner, or prime supplier. Neither the regional office nor the national office of the FEO has any major involvement in the state set-aside system, other than the determination of the state setaside percentage by the national office of FEO. III. NATIONAL, REGIONAL, AND STATE RESPONSIBILITIES Although the Emergency Petroleum Act of 1973 requires that crude oil, residual fuel oil and refined products be allocated to achieve specific overall objectives and within defined general guidelines, there are significant differences among the various allocation programs. The differences involve both the applicability of the programs within the industry and the using public, and how the programs themselves are administered. Three organizational levels are involved in the administration of the program: The National Office of the FEO is responsible for the following functions: Setting policy for case resolution in Regional Offices, The administration and issuance of allocation orders for Crude oil and refinery yield control Butane Aviation fuels (civil air carriers and public aviation) Petrochemical feedstocks Other products. The determination of State set-aside percentages The determination of allocation levels for priority Monitoring industry actions to redistribute fuels Directing, where necessary, redistribution of fuels Coordination with State Offices, Regional Offices, and The dissemination of information on fuel inventories and supply projections Cost of Living Council approvals of price increases Granting of interim relief -- either full or partial Review of administrative appeals on initial actions All of the programs administered by the national office of the FEO involve a limited number of participants in the private sector, as compared to the programs administered by the Regional Offices which typically involve a much larger number of participants. The general allocation methodology and the procedures for adjustment to base period volumes which apply to regionally-administered programs differ from those which apply to nationally-administered programs. Complaints, adjustments and appeals for National programs must be processed by the National Office. 2. REGIONAL RESPONSIBILITIES The Regional Offices of the FEO are responsible for the following functions: The resolution of all cases, reconsideration of appealed actions taken by a regional office, and the administration of the following programs: Middle distillates (except state controlled Motor gasoline (except state controlled set-asides) Residual fuel oil (except that used for utilities Aviation fuel (except civil air carriers) Propane (except state-controlled set-asides and Granting of interim relief either full or partial The direction of compliance efforts within the region The implementation of auditing, application, verification, and investigation procedures within the region Coordination between FEO headquarters and state offices. For each of these programs administered by the Regional Offices except aviation fuel, there is a state set-aside. The supplier/ purchaser relationship and the allocation methodology for all of these programs except propane is described in subsequent paragraphs, as are adjustments to base period volumes (or to an allocation) for all of these programs except propane. Initial appeals related to these programs are also processed by the Regional Offices. Propane, while also administered by the regional offices of the FEO, is allocated differently and is subject to different reporting requirements than the other four programs. There is a state set-aside for propane. However, the supplier/purchaser relationships |