Gasoline Allocation: A Chaotic Program in Need of Overhaul

GAO was requested to review the problems in the Department of Energy's (DOE) administration of its gasoline allocation program and to identify program weaknesses. The gasoline allocation program is the only program which can be used to manage the distribution of supplies when shortfalls are under 20 percent. Basically, gasoline allocations are determined by reference to a historical base period. Suppliers must sell to the same purchasers who bought during the base period, although the purchasers are not obligatd to buy the volumes offered them. The amounts purchased during the base period are used to determine the quantity to which purchasers are entitled. Priority is given to certain national defense and agricultural uses. The remainder is allocated to nonpriority purchasers as a fraction of the base period volume. Each prime supplier generally must use a uniform allocation fraction nationwide in distributing the gasoline, unless DOE directs or approves the use of a different fraction for a particular region. A "set-aside" program permits States to direct the distribution of a portion of the gasoline to meet hardship and emergency requirements within the State. Each prime supplier must set aside 5 percent of the supplies for this purpose. Firms can request an exemption from the regulations or appeal a DOE decision through the DOE Office of Hearings and Appeals.