(7) Notwithstanding any provision of this part to the contrary, naphtha and gas oils are excluded from this part.

(8) Notwithstanding the provisions of Subpart K of this part, other products as defined in § 211.202 of this part are excluded from this part.

(9) Notwithstanding the other provisions of this part, including Subpart H of this part, aviation turbine fuel (naphtha-base and kerosene-base) is excluded from this part.

(10) Notwithstanding the other provisions of this part, including Subpart H of this part, aviation gasoline is excluded from this part.

(11) Notwithstanding the other provisions of this part, including Subparts D and E of this part, butane and natural gasoline and the butane and the natural gasoline components of natural gas liquids are excluded from this part.

(c) State set-asides. State set-asides are provided for middle distillates, residual fuel oil, motor gasoline and propane.

(Emergency Petroleum Allocation Act of 1973, Pub. L. 93-159, as amended, Pub. L. 93-511, Pub. L. 94-99, Pub. L. 94-133, Pub. L. 94-163, and Pub. L. 94-385; Federal Energy Administration Act of 1974, Pub. L. 93-275, as amended, Pub. L. 94-332, Pub. L. 94-385, Pub. L. 95-70, and Pub. L. 95-91; Energy Policy and Conservation Act, Pub. L. 94-163, as amended, Pub. L. 94-385, and Pub. L. 9570; Energy Conservation and Production Act, Pub. L. 94-385, as amended, Pub. L. 9570, Pub. L. 95-91; Department of Energy Organization Act, Pub. L. 95-91; E.O. 11790, 39 FR 23185; E.O. 12009, 42 FR 46267)

[39 FR 35511, Oct. 1, 1974, as amended at 39 FR 44406, Dec. 24, 1974; 41 FR 13898, Apr. 1, 1976; 41 FR 24518, 24520, June 16, 1976; 41 FR 30098, July 22, 1976; 41 FR 44152, Oct. 7, 1976; 44 FR 7067, Feb. 5, 1979; 44 FR 70120, Dec. 6, 1979; 45 FR 74673, Nov. 10, 1980]

§ 211.2 Relationship of subparts.

Unless otherwise specified in Subparts D through K of this part, the general provisions set forth in this subpart apply to the mandatory allocation of all allocated products.

NOTE: The provisions of this section may be affected by Standby Regulation 211-2. Standby Regulation 211-2 appears in Appendix A to Part 211. For the convenience of the user, a table listing all Standby Regulations and sections affected appears in the Finding Aids section of this volume.

§ 211.9 Supplier/purchaser relationships.

(a) Supplier/wholesale purchaser relationship. (1) Each supplier of an allocated product shall supply all wholesale purchaser-resellers and all wholesale purchaser-consumers which purchased or obtained that allocated product from that supplier during the base period as specified in Subparts D through K of this part.

(2)(i) Unless otherwise provided in this part or directed by DOE, the supplier/wholesale purchaser-reseller relationships defined by specific dates or base periods or otherwise imposed pursuant to this part shall be maintained for the duration of the Mandatory Petroleum Allocation Program and may not be waived or otherwise terminated without the express written approval of DOE.

(ii) Unless otherwise provided in this part or directed by FEA, the supplier/ wholesale purchaser-consumer relationships defined by specific dates or base periods or otherwise imposed pursuant to this part shall be maintained for the duration of the Mandatory Petroleum Allocation Program and may not be revised or otherwise terminated except that any such relationship may be terminated by the mutual consent of both parties.

(b) Supplier/end-user relationship. Each supplier of an allocated product shall, to the maximum extent practicable, supply all end-users which purchased that allocated product from that supplier as of January 15, 1974, and which are entitled to an allocation level under the provisions of Subparts D through K of this part.

(c) Changes in ownership or brand. The supplier/purchaser relationships required by this part shall not be altered by (1) changes in the ownership or right of possession of the real property on which a wholesale purchaser or end-user maintains its on-going business or end use; or (2) changes in the brand or franchise under which a wholesale purchaser-reseller maintains its on-going business.

(d) New relationships. (1) Suppliers shall not supply new wholesale purchasers except in accordance with § 211.12(e).

(2) Suppliers shall not supply new end-users except in accordance with § 211.12(f).

(3) New suppliers shall not supply wholesale purchasers or end-users except in accordance with § 211.10(e). (e) Dual capacities. A supplier may act in the capacity of a wholesale purchaser and an end-user. A wholesale purchaser-consumer may also be a wholesale purchaser-reseller. A firm which is acting in one or more different capacities shall comply with the appropriate regulations governing each capacity in which it acts.

NOTE: The provisions of this section may be affected by Standby Regulation 211-2. Standby Regulation 211-2 appears in Appendix A to Part 211. For the convenience of the user, a table listing all Standby Regulations and sections affected appears in the Finding Aids section of this volume.

§ 211.10 Supplier's method of allocation.

(a) General. (1) Suppliers of allocated products shall allocate all of their allocable supply in accordance with the provisions of this section unless otherwise specified in Subparts D through K of this part. Each supplier shall determine its allocation fraction pursuant to the provisions of paragraph (b) of this section. Suppliers shall then allocate to wholesale purchasers and end-users in accordance with the provisions of paragraph (c) of this section. Suppliers of endusers without allocation levels shall allocate their allocable supply in accordance with the provisions of paragraph (d) of this section. The method of allocation for new suppliers is specified in paragraph (e) of this section. Suppliers with allocation fractions less than one (1.0) must act in accordance with the provisions of paragraph (f) of this section, while suppliers with allocation fractions in excess of one (1.0) must act in accordance with the provisions of paragraph (g) of this section. Suppliers which sell products with different uses which are subject to allocation under more than one subpart shall determine the applicable subpart by reference to paragraph (h) of this section.

(2) For purposes of defining a supplier in this part, a firm shall mean the parent and the consolidated and un

consolidated entities (if any) which it directly or indirectly controls.

(b) Allocation fraction. Each supplier shall determine an allocation fraction prior to making any allocation. A supplier's allocation fraction for any period which corresponds to a base period for an allocated product shall be equal to its allocable supply of that product, which is defined in paragraph (b)(1) of this section, for that period, divided by its supply obligation for all levels of distribution, which is defined in paragraph (b)(2) of this section. Suppliers shall adjust their allocation fractions for each such period to reflect adjustments in their supply obligation and in their allocable supply. Each supplier shall only have a single allocation fraction for all purchasers except to the extent permitted in § 211.14 or unless permitted or required by order of the DOE. Suppliers with two or more distribution subsystems or regions independent of one another may apply to the DOE National Office, in accordance with Subpart G of Part 205 of this chapter, for permission to use multiple allocation fractions whenever use of a single allocation fraction would be impracticable or inconsistent with the objectives of the program.

(1) Allocable supply. Each supplier's allocable supply of an allocated product for a period which corresponds to a base period shall be equal to its total supply for that period, which is the sum of its estimated production, including amounts received under processing and exchange agreements, imports (except to the extent imports are excluded pursuant to § 211.88), purchases and any reduction in inventory of that allocated product made pursuant to § 211.22 except as otherwise ordered by ERA; less (i) any amounts designated as a state set-aside for a prime supplier pursuant to § 211.17, (ii) any amounts of allocation requirements supplied directly to end-users or wholesale purchaser-consumers under an allocation level not subject to an allocation fraction, (iii) any amounts supplied to wholesale purchaser-resellers which have certified these amounts to be for ultimate use under an allocation level not subject to an allocation fraction, and (iv) any

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amounts supplied to customers through exchange agreements. Any existing inventory, production, importation or purchase of an allocated product used to increase that inventory consistent with the provisions of § 211.22 shall not be included in the allocable supply of that product.

(2) Supply obligation—(i) General. A supplier's supply obligation of a particular allocated product is the sum of (A) the amounts of its wholesale purchaser-resellers' base period volumes as adjusted pursuant to § 211.13 for unusual growth and other allowable factors, which were supplied by the supplier during the appropriate base period provided that the wholesale purchaser is still in business; (B) the amounts of base period uses of new wholesale purchasers and end-users which are assigned to or accepted by the supplier in accordance with the provisions of § 211.12; and (C) the amounts of allocation requirements of end-users and wholesale purchaserconsumers supplied by the supplier; minus (D) any amounts of allocation requirements supplied directly to endusers or wholesale purchaser-consumers under an allocation level not subject to an allocation fraction; and (E) any amounts supplied to wholesale purchaser-resellers which have certified those amounts to be for ultimate use under an allocation level not subject to an allocation fraction. The supply obligation of a retail sales outlet for motor gasoline shall also inIclude an amount equal to its total sales of motor gasoline during the base period to end-users not entitled to an allocation level. A wholesale purchaser's base period volume, allocation requirements and allocation levels are defined below.

(ii) Base period use. Base period use means base period volume or adjusted base period volume, as appropriate. A wholesale purchaser's base period volume of a particular allocated product is the volume of that allocated product purchased or obtained during the appropriate base period as determined in accordance with § 211.12(c), in the case of a new wholesale purchaser, base period volume means the volume assigned pursuant to § 211.12(c). Base period volume, howev

er, does not include any amounts of an allocated product obtained pursuant to in kind exchange agreements involving a single product which are normal business operating procedures except the difference between the total amounts received under exchange agreements and the total amounts supplied to customers through exchange agreements. Suppliers do not have a base period volume except when acting in the capacity of wholesale purchasers. Depending on the applicable allocation level, endusers may have a base period volume or may be treated on the basis of current requirements. Adjustments to base period volumes shall be made in accordance with the provisions of § 211.13.

(iii) Allocation requirements. The allocation requirement of an end-user or wholesale purchaser-consumer is the product of that purchaser's current requirements or base period use multiplied by the applicable allocation level.

(iv) Allocation levels. An allocation level is the percentage of the current requirements or base period use of an end-user or wholesale purchaser-consumer that its supplier shall supply if sufficient volumes of the allocated product are available. Allocation levels are assigned on the basis of the use to be made of the product and the type of purchaser receiving the product.

(c) Allocation by suppliers to wholesale purchasers and end-users. There shall be two levels of priority in the allocation by suppliers to wholesale purchasers and end-users:

(1) First priority. The first priority shall be for each supplier at every distribution level (i) to allocate from its total supply to wholesale purchaser-resellers any amounts which those purchasers have certified pursuant to § 211.12(d)(2) to be for ultimate use under an allocation level not subject to an allocation fraction and (ii) to allocate from its total supply to endusers and wholesale purchaser-consumers supplied directly under an allocation level not subject to an allocation fraction sufficient volumes of the allocated product to supply one hundred percent of those purchasers' allocation requirements which suppliers of those purchasers have certified pursu

ant to § 211.12(d)(1). The amounts allocated under this first priority shall not be subject to the supplier's allocation fraction.

(2) Second priority. The second priority for each supplier shall be (i) to allocate to each wholesale purchaserreseller a volume of allocated product equal to the product of that supplier's allocation fraction multiplied by the amount equal to that wholesale purchaser-reseller's base period use minus any amounts which that purchaser has certified to be for ultimate use under an allocation level not subject to an allocation fraction and (ii) to allocate from its allocable supply to all end-users and wholesale purchaserconsumers supplied directly under an allocation level subject to an allocation fraction a volume of allocated product equal to the product of that supplier's allocation fraction multiplied by the allocation requirements of those purchasers.

(3) Allocation level priority. Allocation levels listed in Subparts D through K are not arranged in sequence of priority except that the allocation levels not subject to an allocation fraction must be supplied as the first order of priority. Suppliers shall distribute their allocable supply to all classifications of purchasers listed within each particular percentage allocation level and among percentage allocation levels other than levels not subject to an allocation fraction without regard to the order of listing.

(d) Purchasers without allocation levels. Notwithstanding the provisions of paragraphs (c) and (g) of this section, suppliers such as retail gasoline dealers, which supply both end-users or wholesale purchaser-consumers which are not entitled to an allocation level and end-users or wholesale purchaser-consumers which are entitled to an allocation level shall allocate their allocable supply in the following

manner:

(1) The first priority for each supplier shall be to allocate to all end-users and wholesale purchasers which are entitled to an allocation in accordance with the provisions of paragraph (c) of this section.

(2) The second priority for each supplier shall be to distribute equitably

the remainder of the supplier's allocable supply among all end-users or wholesale purchaser-consumers which are not entitled to an allocation level. A state may require or authorize priorities to or among such end-users or wholesale purchaser-consumers purchasing the allocated product for the uses listed in the allocation levels for that product in the subpart of this part applicable to the particular allocated product. Priority treatment, per se, when granted in accordance with the provisions of this subparagraph, shall not be considered a form of discrimination among purchasers or any other prohibited conduct under § 210.62 of this chapter.

(e) New supplier. (1) A supplier which was not a base period supplier but was a supplier prior to January 15, 1974 shall supply, in accordance with the provisions of this section, (i) wholesale purchasers which it supplied as of January 15, 1974 and which have no base period supplier; (ii) any assigned purchasers; (iii) new wholesale purchasers acquired after January 15, 1974 in accordance with the provisions of § 211.12; and (iv) to the maximum extent possible, end-users.

(2) A supplier which was not a supplier prior to January 15, 1974 shall be considered to have no supply obligation and shall not allocate supplies to any purchaser without DOE approval.

(f) Allocation fractions less than one. (1) When a supplier's allocation fraction is less than one (1.0), a supplier shall reduce, on a pro-rata basis, the amounts supplied to end-users and wholesale purchasers for uses subject to the allocation fraction. End-users and wholesale purchaser-consumers supplied under an allocation level not subject to an allocation fraction, shall, however, be supplied at a constant one hundred percent of allocation requirements. Wholesale purchaser-resellers which certify amounts of an allocated product to be for ultimate use under an allocation level not subject to an allocation fraction shall also be supplied at one hundred percent of these certified amounts. These purchasers shall not receive a pro-rata reduction unless the supplier's total supply is not sufficient to supply all such end-users and wholesale purchasers at one hundred

percent of allocation requirements or certified amounts, as appropriate.

(2) Any supplier whose allocation fraction is equal to or less than one (1.0) and whose wholesale purchasers (other than retail sales outlets of gasoline owned and operated by that supplier) and end-users entitled to receive an allocation from that supplier either have not purchased or have notified the supplier of their intent not to purchase by the end of the period corresponding to a base period may report and dispose of such volumes in accordance with the provisions of paragraph (g) of this section.

(3) Suppliers of purchasers affected by government mandated energy curtailments. Any supplier which has an allocation fraction less than 0.8 for a period which corresponds to a base period and which has purchasers assigned to it pursuant to § 211.12(h) or which has purchasers which have received adjustments to base period use pursuant to § 211.12(h) or which has purchasers entitled to an allocation level of one hundred (100) percent of current requirements subject to an allocation fraction which have increased current requirements by reason of a curtailment action specified in § 211.12(h) shall allocate its product as follows:

(i) The supplier shall report to the DOE National office and the appropriate DOE regional office (A) its allocation fraction, (B) the allocation requirements of the purchasers which have been assigned to it pursuant to § 211.12(h) and which are subject to an allocation fraction, and the portions of the allocation requirements of its purchasers which result from adjustments to base period uses received pursuant to 211.12(h) and current requirements increased by reason of a curtailment action specified in § 211.12(h) and which are subject to an allocation fraction, and (C) the amount of product which would remain available if the supplier applied an allocation fraction of 0.8 to all the allocation requirements of its purchasers except those allocation requirements described in paragraph (f)(3)(i)(B) of this section. The report shall be submitted in writing to the DOE National office, with a copy to the appropriate Regional of

fices, at the same time that supplier reports to DOE pursuant to § 211.222(b), or if the supplier is not required to report to DOE pursuant to § 211.222(b), the report shall be filed with the DOE National office and with the appropriate Regional DOE office within five (5) days of the supplier's determination than its allocation fraction will be less than 0.8. The report must be clearly labeled "Curtailed Product Report" both on the document and on the outside of the envelope in which the document is transmitted. The DOE shall provide written notice to each supplier of the exact time of receipt of the report.

(ii) Within ten (10) days of actual receipt of any report made pursuant to this paragraph, the National DOE or the appropriate Regional DOE may:

(A) Assign other suppliers to the reporting supplier;

(B) Reassign some or all of the supplier's purchasers affected by a curtailment action to other suppliers;

(C) Reassign a portion or all of the base period use or increased current requirements of any purchasers affected by a curtailment action to other suppliers;

(D) Adjust downward the portion of any purchaser's base period use which represents an assignment or adjustment of base period use pursuant to § 211.12(h) or any purchaser's current requirements increased by reason of a curtailment action specified in

§ 211.12(h);

(E) Require the supplier to allocate its allocable supply by applying a fraction no greater than 0.8 to all the allocation requirements of its purchasers which are subject to an allocation fraction other than the allocation requirements of the purchasers which have been assigned pursuant to § 211.12(h) and the portions of the allocation requirements of its purchasers which result from adjustments to base period uses received pursuant to § 211.12(h) and current requirements increased by reason of a curtailment action specified in § 211.12(h); and by then distributing the remainder of the supplier's allocable supply on a pro rata basis among the allocation requirements of its purchasers which result from assignments and adjust