prietorship or any other entity however organized including charitable, educational, or other eleemosynary institutions, and the Federal Government including corporations, departments, Federal agencies, and other instrumentalities, or local government units Provided, That such entity or entities are located or doing business in the Commonwealth. The DOCA may, in regulations and forms issued in this part, treat as a firm: (a) A parent and the consolidated and unconsolidated entities (if any) which it directly or indirectly controls, (b) a parent and its consolidated entities, (c) an unconsolidated entity, or (d) any part of a firm.

"Importer" means any firm that owns at the first place of storage any petroleum brought into the Commonwealth and includes petroleum product brought into the Commonwealth from the mainland.

"Independent marketer" means either a branded independent marketer or a non-branded independent marketer.

"LPG" means liquefied petroleum gas, and includes propane and butane, and propane/butane mixes, but not ethane.

"Middle distillate" means any derivatives of petroleum including kerosene, home heating oil, range oil, stove oil, and diesel fuel, which have a fifty (50) percent boiling point in the ASTM D-86 standard distillation test falling between 371° and 700° F. Products specifically excluded from this definition are kerosene-base and naphtha-base jet fuel, heavy fuel oils as defined in VV-F-815C or ASTM D-396, grades #4, 5, and 6, intermediate fuel oils (which are blends containing #6 oil), and all specialty items such as solvents, lubricants, waxes and process oil.

"Motor gasoline" means a mixture of volatile hydrocarbons, suitable for operation of an internal combustion engine, whose major components, are hydrocarbons with boiling points ranging from 140° to 390° F and whose source is distillation of petroleum and cracking, polymerization, and other chemical reactions by which the naturally occurring petroleum hydrocarbons are converted to those that have superior fuel properties.

"Propane-butane mix" means any mixture consisting exclusively of propane and butane which contains greater than ten (10) percent by weight.

"Purchaser" means a wholesale purchaser, an end-user, or both, but does not include an exporter.

"Refined petroleum product" means gasoline, kerosene, middle distillate (including number 2 fuel oil), LPG, refined lubricating oils, or diesel fuel.

"Refiner" means those firms which own, operate or control the operations of one or more industrial plants, regardless of capacity, processing crude oil feedstock or refined petroleum products and manufacturing propane, butane, motor gasoline, middle distillate or residual fuel oil.

"Residual fuel oil" means the fuel oils commonly known as: (a) No. 4, No. 5 and No. 6 fuel oils; (b) Bunker C; (c) Navy Special Fuel Oil; (d) crude oil when burned directly as a fuel; and all other fuel oils which have a fifty (50) percent boiling point over 700° F in the ASTMD-86 standard distillation test.

"Retail sales outlet" means a site on which a supplier maintains an ongoing business of selling any petro

leum product to end-users or wholesale purchaser-consumers.

"Set-aside volume" means with respect to a particular prime supplier, the amount calculated pursuant to § 660.110(c)(1).

"Supplier" means any firm located or doing business in the Commonwealth, which presently, during the base period or during any period between the base period and the present supplies, sells, transfers or otherwise furnishes (as by consignment) any petroleum product to wholesale purchasers, end-users or exporters. Supplier includes but is not limited to refiner, importer, exporter, reseller, jobber, and retailer.

means a

"Supply obligation" means supply obligation as defined in § 660.103(b)(2). "Wholesale purchaser" wholesale purchaser-reseller (other than an exporter) or a wholesale purchaser-consumer, or both.

"Wholesale purchaser-consumer" means any firm that is an ultimate consumer in the Commonwealth, which, as part of its normal business practices, purchased or obtained in any completed calendar year subsequent to 1971 more than 24,000 gallons of a petroleum product from a supplier and received delivery of that product into a storage tank substantially under the control of that firm at a fixed location in the Commonwealth. purchaser-reseller" means any firm which purchases, receives through transfer, or otherwise obtains (as by consignment) a petroleum product and resells or otherwise transfers it to other purchasers in the Commonwealth without substantially changing its form.

"Wholesale

Subpart C-General Allocation Rules

§ 660.101 Applicability.

This subpart applies to each petroleum product sold for use within the Commonwealth after 11:59 p.m., October 31, 1974, and to each firm which refines, imports, exports, purchases or sells petroleum products in the Commonwealth.

(a) Supplier/wholesale purchaser relationship. Each supplier of a petroleum product shall supply all wholesale purchasers which purchased or obtained that petroleum product from that supplier during the base period as specified in the provisions of this part or as otherwise ordered by the DOCA.

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

(c) New relationships. (1) Suppliers shall not supply new wholesale purchasers except in accordance with § 660.105(d).

(2) New suppliers shall not supply wholesale purchasers or end-users except in accordance with § 660.103(d).

(d) Dual capacities. A supplier may also act in the capacity of a wholesale purchaser, an importer, an exporter, or an end-user. A wholesale purchaser may act in the capacity of both a wholesale purchaser-reseller and wholesale purchaser-consumer. A firm which is acting in one or more different capacities shall comply with the appropriate regulations governing each capacity in which it acts.

§ 660.103 Supplier's method of allocation. (a) General. (1) Subject to the prenotification provisions in subpart E, suppliers of petroleum products shall allocate all of their allocable supply in accordance with the provisions of this section. Each supplier shall determine its allocation fraction pursuant to the provisions of paragraph (b) of this section. Suppliers shall then allocate to purchasers in accordance with the provisions of paragraph (c) of this section. The method of allocation for new suppliers is specified in paragraph (d) of this section. Suppliers with allocation fractions less than one (1.0) must act in accordance with the provisions of paragraph (e) of this section while

suppliers

with allocation fractions equal to or greater than one (1.0) must act in accordance with the provisions of paragraph (f) of this section. Suppliers, other than new suppliers, which in a particular base period have no supplier/purchaser relationships must act in accordance with the provisions of paragraph (g) of this section.

(2) For purposes of defining a supplier in this part, a firm shall mean the parent and the consolidated and unconsolidated entities (if any) which it directly or indirectly controls.

(b) Allocation fraction. Each supplier shall determine a single allocation fraction for each petroleum product prior to making any allocation. A supplier's allocation fraction for any allocation period for a petroleum 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.

(1) Allocable supply. Each supplier's allocable supply of a petroleum product for an allocation 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, purchases and any reduction in inventory of that petroleum product made pursuant to § 660.9 except as otherwise ordered by DOCA; less (i) any amounts designated as set-aside pursuant to § 660.110; (ii) any amount supplied to customers through exchange agreements; and (iii) any amount in excess of the amount sold for use within the Commonwealth of Puerto Rico in the 1973 period corresponding to the allocation period unless otherwise ordered by the DOCA pursuant to § 660.9. Any existing inventory, production, importation or purchase of a petroleum product used to increase that inventory consistent with the provisions of § 660.9 shall not be included in the allocable supply of that product.

(2) Supply obligation—(i) General. A supplier's supply obligation of a particular petroleum product is the sum of (A) the amounts of its wholesale purchasers' base period volumes, as

adjusted pursuant to § 660.106, which were supplied by the supplier during the appropriate base period Provided, That the purchaser is still in business or continues to use the product for the same purposes for which it was purchased in the base period; (B) the amounts of adjusted base period volumes of new wholesale purchasers which are assigned to or accepted by the supplier in accordance with the provisions of § 660.105; and (C) the amount equal to its total sales to endusers during that base period. Base period volume is 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 petroleum product is the volume of that petroleum product purchased or obtained during the appropriate base period as determined

in accordance with

§ 660.105(c) or the base period volume as adjusted pursuant to § 660.106. Base period volume, however, does not include amounts of a petroleum 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. In the case of a new wholesale purchaser, base period volume means the volume assigned or agreed to pursuant to § 660.105(d). Adjustments to base period volumes shall be made in accordance with the provisions of § 660.106.

(c) Allocation by suppliers to wholesale purchasers and end-users-(1) Wholesale purchasers. A supplier shall allocate to each of its wholesale purchasers a volume of a petroleum product equal to the product of that supplier's allocation fraction multiplied by an amount equal to that wholesale purchaser's base period use.

(2) End-users. Suppliers shall allocate equitably among end-users, a volume of petroleum product equal to the product of that supplier's allocation fraction multiplied by an amount equal to its total sales to end-users in

the appropriate base period or adjusted base period.

(d) 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 purchasers assigned by DOCA; (iii) new wholesale purchasers acquired after January 15, 1974 in accordance with the provisions of § 660.105; 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 DOCA approval.

(3) Notwithstanding any other provisions of paragraph (d) of this section, a supplier which was not a base period supplier but which is a supplier on October 31, 1974 shall for the allocation periods which includes the months of November and December, supply the wholesale purchasers assigned by the DOE prior to October 31, 1974.

(e) 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.

(2) Subject to the requirements of paragraph (c)(2) of this section, any supplier whose allocation fraction is less than one (1.0) and whose wholesale purchasers either have not purchased or have notified the supplier of their intent not to purchase the volume of petroleum product calculated pursuant to paragraph (c)(1) of this section by the end of the current allocation period may report and dispose of such volumes in accordance with the provisions of paragraph (f)(2)(i) of this section.

(f) Allocation fractions equal to or greater than one. (1) In allocating allocable supplies of any petroleum product among wholesale purchasers and end-users no supplier may use an allocation fraction greater than one (1.0). If a supplier's allocable supply is of sufficient magnitude that the alloca

tion fraction exceeds one (1.0), the supplier shall make allocations based on an allocation fraction of one (1.0), and shall comply with the provisions of paragraph (f)(2) of this section.

(2) (i) Each prime supplier and each supplier of unleaded gasoline shall report the volume of surplus petroleum product remaining in allocable supply to the DOCA in accordance with the provisions of §§ 660.152 and 660.153. The DOCA may direct that the petroleum product be distributed among other suppliers, sold to designated wholesale purchasers or endusers, be distributed to the reporting supplier's purchasers on a pro rate basis, be accumulated in inventory, or be added to the supplier's set-aside volume. If the reporting supplier is not notified to the contrary by the DOCA within fifteen (15) days after filing of its report with the DOCA, he may distribute these volumes at his discretion; provided however, that the supplier maintains adequate records to allow DOCA, upon request, to ascertain the disposition of the surplus product.

(ii) A supplier (other than a prime supplier or a supplier of unleaded gasoline) may distribute its surplus petroleum product remaining in allocable supply at its discretion.

(3) Notwithstanding the provisions of paragraphs (e)(2) or (f)(2) of this section, no supplier shall supply and no end-user or wholesale purchaserconsumer shall accept quantities of a petroleum product which exceed one hundred (100) percent of that end-user or wholesale purchaser-consumer's current requirements, unless directed by DOCA.

(g) Suppliers without wholesale purchasers or end-users. A supplier such as an exporter which was in existence prior to January 15, 1974 but which in a particular base period has no supplier/purchaser relationships established pursuant to § 660.102, shall report its total supply to the DOCA pursuant to the provisions of § 660.153(a). Unless the supplier is notified by the DOCA to make directed sales pursuant to § 660.9, the suppliers shall allocate its petroleum products pursuant to the DOE regulations.

§ 660.104 Basis for purchaser's entitlement to allocation.

(a) Basis of entitlement. A wholesale purchaser shall receive an allocation based on its conduct of an on-going business in the Commonwealth or maintenance of an established end-use within the Commonwealth.

(b) End-users and wholesale purchasers as a firm. (1) For purposes of defining a wholesale purchaser-consumer in this part, a firm shall mean those parts of the parent and the consolidated and unconsolidated entities (if any) which it directly or indirectly controls which act as ultimate consumers in the Commonwealth including all sites, storage tanks and other facilities or entities of the wholesale purchaser-consumer that utilize or store a petroleum product in the Commonwealth.

(2) Except as provided in paragraph (b)(3) of this section, for purposes of defining a wholesale purchaser-reseller in this part, a firm shall mean all those parts of the parent and the consolidated and unconsolidated entities (if any) which it directly or indirectly controls which sell petroleum products in the Commonwealth.

(3) Each firm or part of a firm which operates an on-going business of selling motor gasoline at a retail sales outlet shall be considered a separate firm with respect to each such outlet, and therefore shall be a separate wholesale purchaser-reseller. The entity which merely holds a real property interest in a retail sales outlet on which another entity operates an ongoing business shall not be considered the wholesale purchaser-reseller with respect to that outlet.

(c) Loss of allocation entitlement for going out of business-(1) General. Wholesale purchasers which have gone out of business shall not be eligible for allocations based on volumes received or purchases made prior to going out of business.

(d) Retail sales outlets for gasoline. For purposes of this paragraph (c) a wholesale purchaser-reseller which operates a retail sales outlet shall be deemed to have gone out of business with respect to that outlet if it vacates the site on which it conducts such business. Notwithstanding the forego

ing, an independent marketer shall not be deemed to have gone out of business if (i) the independent marketer vacates the site on which it formerly operated a retail sales outlet; (ii) the former site is closed as a retail sales outlet or is operated as such by a firm that is not an independent marketer; and (iii) the independent marketer that occupied the former site, within a reasonable time, as determined by the DOCA, re-establishes another retail sales outlet at another loIcation serving substantially the same customers or market that was served by the former site.

(e) Transfer of entitlement-(1) General. The right to receive an allocation shall not be assignable separately but shall be considered an integral part of the on-going business or established end-use. The right to an allocation shall be deemed to have been transferred only when the entire business or activity of the firm is transferred to a successor firm.

(2) Retail sales outlets for gasoline. For purposes of this paragraph (d), whenever a wholesale purchaser-reseller is deemed to have gone out of business in accordance with paragraph (c)(2) of this section, the right to an allocation with respect to the retail sales outlet shall be deemed to have been transferred to its successor in the site, provided such successor establishes the same ongoing business on the site within a reasonable period of time, as determined by the DOCA, after its predecessor vacates the premises.

§ 660.105 Purchaser's allocation entitlement.

(a) Scope. This section describes a purchaser's allocation entitlements. Paragraph (b) of this section specifies the volumes of a petroleum product which wholesale purchasers are entitled to receive from suppliers. The method by which wholesale purchasers determine base period volumes is provided in paragraph (c) of this section. Paragraphs (d) and (e) of this section set forth procedures by which new wholesale purchasers and new importer-consumers, respectively determine their entitlements and suppliers.