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Code of Federal Regulations Title 19. Customs Duties 19 CFR Pt. 146, App. Appendix to Part 146—Guidelines for Determining Producibility and Relative Values for Oil Refinery Zones

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Where an example is set out in this appendix, the example is for purposes of illustrating the application of a provision, and where there is any inconsistency between the example and the provision, the provision prevails to the extent of the inconsistency. Alternative formats are also acceptable so long as they are consistent with the provisions of this part.

I. Attribution Using Producibility Showing Manufacturing Periods From Admission to Removal Within a Calendar Month.

Volume losses and gains accounted for by weight.

Day 1

Receipt into the refinery subzone during a 30–day month:

50,000 pounds privileged foreign (PF) class II crude oil.

50,000 pounds PF class III crude oil.

50,000 pounds domestic status class III crude oil.

Day 10

Removal from the refinery subzone for exportation of 50,000 pounds of aviation gasoline.

The period of manufacture for the aviation gasoline is Day 1 to Day 10. The refiner must first attribute the designated source of the aviation gasoline.

In order to maximize the duty benefit conferred by the zone operation, the refiner chooses to attribute the exported aviation gasoline to the privileged foreign status crude oil. Under the tables for potential production (T.V. 66–16), class II crude has a 30% potential, and class III has a 40% potential. The maximum aviation gasoline producible from the class II crude oil is 15,000 pounds (50,000 x .30). The maximum aviation gasoline producible from the privileged foreign status class III crude oil is 20,000 pounds (50,000 x .40). The domestic class III crude would also make 20,000 pounds of aviation gasoline.

The refiner could attribute 15,000 pounds of the privileged foreign class II crude oil, 20,000 pounds of the privileged foreign class III crude oil, and 15,000 pounds of the domestic class III crude oil as the source of the 50,000 pounds of the aviation gasoline that was exported;  35,000 pounds of class II crude oil would be available for further production for other than aviation gasoline, 30,000 pounds of privileged foreign class III crude oil would be available for further production for other than aviation gasoline, and 35,000 pounds of domestic status class III crude oil would be available for further production, of which up to 5,000 pounds could be attributed to aviation gasoline.

Day 21

Receipt in the refinery subzone:

50,000 pounds PF status class I crude oil.

50,000 pounds PF status class IV crude oil.

Day 30

Removal from the refinery subzone:

30,000 pounds of motor gasoline for consumption.

10,000 pounds of jet fuel sold to the US Air Force for use in military aircraft.

10,000 pounds of aviation gasoline sold to a U.S. commuter airline for domestic flights.

10,000 pounds of kerosene for exportation.

To the extent that the crude oils that entered production on Day 1 are attributed as the designated sources for the products removed on Day 30, the period of manufacture is Day 1 to Day 30. If the refiner chooses to attribute the crude oils that were admitted on Day 21 as the designated sources of the products removed on Day 30 using the production standards published in T.D. 66–16, the manufacturing period is Day 21 to Day 30. This choice will be important if a relative value calculation on the privileged foreign status crude oil is required, because the law requires the value used for computing the relative value to be the average per unit value of each product for the manufacturing period. Relative value must be calculated if a source feedstock is separated into two or more products that are removed from the subzone refinery. If the average per unit value for each product differs between the manufacturing period from Day 1 to Day 30 and the manufacturing period from Day 21 to Day 30, the correct period must be used in the calculation.

In order to minimize duty liability, the refiner would try to attribute the production of the exported kerosene and the sale of the jet fuel to the US Air Force to the privileged foreign crude oils. For the same reason, the refiner would try to attribute the removed motor gasoline and the aviation gasoline for the commuter airline to the domestic crude oil.

Accordingly, the refiner chooses to attribute up to 5,000 pounds of the domestic status class III crude as the source of the 10,000 pounds of aviation gasoline removed from the subzone refinery for the commuter airline. Since no other aviation gasoline could have been produced from the crude oils that were admitted into the refinery subzone Day 1, the refiner must attribute the remainder to the crude oils that entered production on Day 21. Again, using the production standards from T.D. 66–16, the class I crude could produce aviation gasoline in an amount up to 10,000 pounds (50,000x.20). Likewise, the class IV crude oil could produce aviation gasoline in an amount up to 8,500 pounds (50,000x.17).

The refiner selects use of the class I crude as the source of the aviation gasoline. The refiner could attribute up to 27,300 pounds (35,000−5,000x.91) of the domestic class III crude oil as the source of the motor gasoline. This would leave 2,700 pounds of domestic class III crude available for further production for other than aviation gasoline or motor gasoline. The remaining motor gasoline removed (also 2,700 pounds) must be attributed to a privileged foreign crude oil. The refiner selects the privileged foreign class II crude oil that entered production on Day 1 as the source for the remaining 2,700 pounds of motor gasoline.

This would leave 32,300 pounds of privileged foreign class II crude oil available for further production, of which no more than 27,400 pounds could be designated as the source of motor gasoline. The refiner attributes the jet fuel that is removed from the refinery subzone for the US Air Force for use in military aircraft to the privileged foreign class II crude oil. The refiner could attribute up to 20,995 pounds of jet fuel from that class II crude oil (32,300x.65). Designating that class II crude oil as the source of the 10,000 pounds of jet fuel leaves 22,300 pounds of privileged foreign class II crude oil available for further production, of which up to 10,995 pounds could be attributed as the source of the jet fuel. Because the motor gasoline and the jet fuel, under the foregoing attribution, would be considered to have been separated from the privileged foreign class II crude oil, a relative value calculation would be required.

The jet fuel is eligible for removal from the subzone free of duty by virtue of 19 U.S.C. 1309(a)(1)(A). The refiner could attribute the privileged foreign class II crude oil as being the source of the 10,000 pounds of jet fuel (22,300x.65). The refiner chooses to attribute the privileged foreign class III crude oil as the source of the jet fuel. The refiner could attribute to that class III crude oil up to 15,000 pounds of kerosene (30,000x.50).

II. Attribution on a FIFO Basis

(Accounting for volume losses or gains by the weight method)

Day 1–5

Transfer, into the Refinery Subzone, from one or more storage tanks into process 150 barrels of Privileged Foreign (PF) Class II crude oil, equivalent to 50,000 pounds.

Day 6

Removal from the refinery subzone 119 barrels of residual oils to customs territory, equivalent to 40,000 pounds.

Since the operator uses the FIFO method of attribution, as the product is removed from the subzone, or consumed or lost within the subzone, attribution must be to the oldest feedstock available for attribution. Accordingly, the 40,000 pounds of residual oils will be attributed to 40,000 pounds of the PF Class II crude oil from Day 1–5.

Day 10

Transfer, into the refinery subzone, from one or more storage tanks 4 barrels of domestic motor gasoline blend stock, equivalent to 1,000 pounds to motor gasoline blending tank.

Day 6–15

Transfer, into the refinery subzone, from one or more storage tanks into process 320 barrels of Domestic Class III crude oil, equivalent to 100,000 pounds.

Day 16

Removal from the refinery subzone 14 barrels of asphalt to customs territory, equivalent to 5,000 pounds.

The 5,000 pounds of asphalt will be attributed to 5,000 pounds of PF Class II crude oil from Day 1–5.

Day 17

Removal from the refinery subzone, 324 barrels of motor gasoline to customs territory, equivalent to 81,000 pounds.

The 81,000 pounds of motor gasoline will be attributed to 1,000 pounds of domestic motor gasoline blend stock from Day 10, to the remaining 5,000 pounds of PF Class II crude oil from Day 1–5 and 75,000 pounds of domestic Class III crude oil from Day 6–15.

Day 16–20

Transfer, into the refinery subzone, from one or more storage tanks into process 169 barrels of Privileged Foreign (PF) Class III crude oil, equivalent to 50,000 pounds.

Day 22

Removal from the refinery subzone, 214 barrels of jet fuel for exportation, equivalent to 60,000 pounds.

The 60,000 pounds of jet fuel will be attributed to the remaining 25,000 pounds of domestic Class III crude oil from Day 6–15 and 35,000 pounds of PF Class III crude oil from Day 16–20.

Day 21–25

Transfer, into the refinery subzone from one or more storage tanks into process, 143 barrels of domestic Class I crude oil, equivalent to 50,000 pounds.

Day 30 (End of the Manufacturing Period)

It is determined that during the manufacturing period just ended, that 34 barrels of fuel, equivalent to 10,000 pounds was consumed, and 5 barrels of oil, equivalent to 1,500 pounds was lost in the refining production process within the refinery subzone.

The 10,000 pounds of fuel consumed will be attributed 10,000 pounds of PF Class III crude oil from Day 16–20. The 1,500 pounds of oil lost in the refining production process will be attributed to 1,500 pounds of PF Class III crude oil from Day 16–20. The remaining 3,500 pounds of PF Class III crude oil from Day 16–20 will be the first to be attributed during the next manufacturing period.

III. Relative Value Calculation

Because privileged foreign feedstocks transferred into process during Day 1–5 and Day 16–20 have two or more products attributed to them, each feedstock will require a relative value calculation.

Relative value calculation for UIN Day 1–5, 50,000 pounds, equivalent to 150 barrels.

A

B

C

D

E

F

G

Lbs

BBLS

$/BBL

Product value

R.V. Factor

R.V. BBL

Dutiable BBL

Residual oil

40,000

119

15.00

1,785

.9047

108

108

Asphalt

5,000

14

13.00

182

.7840

11

11

Motor gasoline

5,000

20

26.00

520

1.5682

31

31

Totals

50,000

153

2,487

150

150

A=Pounds Attributed.

B=Equivalent Barrels.

C=Price of Product.

D=B x C.

E=C/(Total of Column D/Attributed Crude BBLS).

Residual Oil RV Factor=15.00/(2,487/150)=.9047.

F=B x E.

G=Dutiable Barrels.

Since all products attributed to the 50,000 pounds (150 BBLS) of PF Class II crude entered customs territory duty equals $7.88 (150x.0525).

Feedstock factor calculation for UIN Day 16–20, 46,500 pounds equivalent to 157 barrels.

Lbs

BBLS

$/BBL

Product value

Feedstock factor

R.V. BBL

Dutiable BBL

Jet Fuel

35,000

125

27.00

3,375

1.1030

138

0

Fuel

10,000

34

12.00

408

0.4902

17

0

Consumed Process Loss

1,500

5

12.00

60

0.4902

2

0

Totals

46,500

164

3,843

157

0

Since jet fuel was exported, no duty is applicable. Fuel consumed for refinery process was consumed within the subzone premises and did not enter customs territory, thus no duty is applicable (assume refinery not barred by duty-free consumption restriction). Likewise, the process loss occurred entirely within the subzone. Therefore, no duty is applicable.

IV. Attribution to Privileged Foreign Feedstock;  Relative Value;  Monthly Manufacturing Period, Weekly Entries, Attribution to a Prior Period;  Volume Loss or Gain Shown by Volume Differences.

An operator who elects to attribute on a monthly basis files the following estimated removal of final products for the first week in September:

Jet Fuel (deemed exported on international flights)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

20,000

Gasoline—Domestic Consumption․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

15,000

Duty-free certified as emergency war material․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

10,000

Petroleum coke exportations․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

10,000

Distillate for consumption․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

5,000

Petrochemicals exported․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

10,000

Total removals․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

70,000

Because it does not elect to make attributions for feedstocks that were charged to operating units during the same week, the operator attributes the estimated removals to final products made during August from the following feedstocks:

Class II PF (privileged foreign) crude․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

20,000

Class III PF crude․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

35,000

Class III D (domestic) crude․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

20,000

Class III NPF (nonprivileged foreign crude․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

20,000

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

95,000

During August the operator produced from those feedstocks:

Jet․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

35,000

Gasoline․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

40,000

Petroleum Coke․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

10,000

Distillate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

5,000

Petrochemicals․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

15,000

․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

105,000

There is a gain of 105,000−95,000=10,000

Using the tables in T.D. 66–16, the following choices are available for attribution:

Charged

Jet

Gasoline

Petrolum coke

Distillate

Petro-chemical

Class II PF Crude

20,000

13,000

17,200

4,400

17,200

5,000

Class III PF Crude

35,000

24,500

31,850

14,000

31,150

10,150

Class III D Crude

20,000

14,000

18,200

8,000

17,800

5,800

Class III NPF Crude

20,000

14,000

18,200

8,000

17,800

5,800

Feedstock factors are calculated:

Barrels

Value barrels

Value

Feedstock factors

Gasoline

40,000

$25

$1,000,000

.9117

Jet Fuel

35,000

23

805,000

.8388

Distillate

5,000

20

100,000

.7294

Petroleum Coke

10,000

10

100,000

.3647

Petrochemicals

15,000

40

600,000

1.4587

105,000

2,605,000

Gain

10,000

$2,605,000

Total

95,000

=$27.42 average value p/bbl

Using the feedstock factor the refiner makes the following attributions:

Jet Fuel

24,192

(20,291 feedstock attributed to Class III PF Crude).

10,808

Class III NPF Crude (attribution of 9066 solely for purpose of accounting for the amount of NPF used).

35,000

Gasoline

5,000

(4,559 feedstock attributed to Class III PF Crude).

5,000

Class III NPF Crude (attribution of 4599 solely for purpose of accounting for the amount of NPF used).

15,000

(13,676 feedstock attributed to Class III D Crude).

Petroleum Coke

8,418

(3,070 feedstock attributed to Class II PF Crude).

1,582

Class III NPF Crude (attribution of 577 solely for purposes of accounting for the amount of NPF used).

10,000

Distillate

5,000

(3,647 feedstock attributed to Class III Domestic).

Petrochemicals

3,975

(5,800 feedstock attributed to Class III NPF Crude).

6,025

(8,789 feedstock attributed to Class III PF Crude).

10,000

V. Weekly Entry, Weekly Manufacturing Period, and Relative Values Calculated on the Actual Weighted Average Values at the End of the Week.

On the weekly estimated production CF 3461, or its electronic equivalent, the refiner is required to provide a pro forma invoice or schedule showing the number of units of each type of merchandise to be removed during the week and their zone and dutiable values. For example, on CF 3461, or its electronic equivalent, the refiner estimates the following shipments and relative values for the next week and files this on the preceding Friday.

Product week 1

PF shipments (MBBLS)

Value/barrel (platts)

Total value

Motor Gasoline

20,000

$35

$700,000

Total Alkylate

25,000

35

875,000

Heavy Reformate

60,000

35

2,100,000

Reformer Feed

110,000

35

3,850,000

Raffinates

200,000

35

7,000,000

Jet Fuel

200,000

35

7,000,000

Total

615,000

$21,525,000

Attributed Feedstock—Class III Crude:  615,000 @ $105 = $64,575 (estimated duties)

During that week the refiner actually removes the following products and reports those on the CF 7501, or its electronic equivalent, filed within 10 business days after the CF 3461, or its electronic equivalent, is filed. Column 3 is the actual “weighted average” value for the manufacturing period, therefore, no reconciliation is necessary.

1

2

3

4

5

6

7

Product

PF Shipments (mbbls)

Value/barrel (wt. avg.)

Total value (2)x(3)

Relative value factor (3)/(8)

Feedstock distribu. (5)x(2)

Liq. duties (6)x(10)(9)

Week 1:

Motor Gasoline

19,977

$35.70

$713,179

1.104545

22,065

$2,317

Total Alkylate

22,907

42.50

973,548

1.314935

30,121

3,163

Heavy Reformate

58,164

31.42

1,827,513

.972123

56,542

5,937

Reformer Feed

100,279

31.42

3,150,766

.972123

97,484

10,235

Raffinates

170,293

29.55

5,032,158

.914266

155,693

16,348

Jet Fuel

168,433

30.04

5,059,727

.929426

156,546

16,437

Total

540,053

16,756,891

518,451

54,437

(9)

(10)

Class III Crude Consumed 518,451 x $.105 = $54,437

Volumetric Gain 21,602

Avg. Value/Barrel Crude Consumed = $16,756,891 ÷ 518,451 = $32.321 (8)

This example shows volumetric gain of 21,602 mbbls. However, in that PF was requested, liquidated duties are only on actual feedstock (class III crude) used in the refining process. (518,451 @ $.105=$54,437).

VI. Weekly Entry, Monthly Manufacturing Period, and Relative Values Calculated on the Actual Weighted Average Values at the End of the Month.

For example, on the CF 3461, or its electronic equivalent, the refiner estimates the following shipments and relative values for the next week and files this on the preceding Friday.

1

2

3

4

Product

PF shipments (mbbls)

Value/barrel (platts)

Total value

Week 1:

Motor Gasoline

20,000

$35

$700,000

Total Alkylate

25,000

35

875,000

Heavy Reformate

60,000

35

2,100,000

Reformer Feed

110,000

35

3,850,000

Raffinates

200,000

35

7,000,000

Jet Fuel

200,000

35

7,000,000

Total

615,000

21,525,000

Attributed Feedstock—Class III Crude:  615,000 @ $.105 = $64,575 (estimated duties)

During the week the refiner actually removes the following products and reports those on the CF 7501, or its electronic equivalent, filed within 10 business days after the CF 3461, or its electronic equivalent, is filed. The reported relative values may be an estimate based on Platts, prior period actual prices, or the refiner's transfer prices. For this example, the estimates are based on the refiner's actual transfer prices. Listed below are the data to be shown on the weekly CF 7501s, or their electronic equivalents, with actual quantities shipped and estimated values for weeks 1–5.

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (estimates)

Total value (2)X(3)

Relative value factor (3)/(8)

Feedstock distrib. (5)x(2)

Liq. duties (6)x(10) (9)

Week 1:

Motor Gasoline

19,977

$35.70

$713,179

1.104545

22,065

$2,317

Total Alkylate

22,907

42.50

973,548

1.314935

30,121

3,163

Heavy Reformate

58,164

31.42

1,827,513

.972123

56,542

5,937

Reformer Feed

100,279

31.42

3,150,766

.972123

97,484

10,235

Raffinates

170,293

29.55

5,032,158

.914266

155,693

16,348

Jet Fuel

168,433

30.04

5,059,727

.929426

156,546

16,437

Total

540,053

16,756,891

518,451

$54,437

(9)

(10)

Class III Crude Consumed 518,451 x $.105 = $54,437

Volumetric Gain 21,602

Avg. Value/Barrel Crude Consumed = $16,756,891 ÷ 518,451 = $32.321 (8)

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (estimates)

Total value

Relative value factor

Feedstock distrib.

Liq. duties

Week 2:

Motor Gasoline

20,651

$36.90

$762,022

1.145429

23,654

$2,484

Total Alkylate

23,435

44.25

1,036,999

1.373584

32,190

3,380

Heavy Reformate

59,819

30.35

1,815,507

.942108

56,358

5,918

Reformer Feed

101,167

30.10

3,045,127

.934347

94,526

9,925

Raffinates

172,317

29.30

5,048,888

.909514

156,726

16,456

Jet fuel

165,291

30.70

5,074,434

.952972

157,519

16,539

Total

542,680

$16,782,977

520,973

$54,702

Class III Crude Consumed 520,973 x $.105 = $54,702

Volumetric Gain 21,707

Avg. Value/Barrel Crude Consumed = $32.215

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (estimates)

Total value

Relative value factor

Feedstock distrib.

Liq. duties

Week 3:

Motor Gasoline

18,689

$34.90

$652,246

1.091819

20,405

$2,142

Total Alkylate

21,511

40.25

865,818

1.259190

27,087

2,844

Heavy Reformate

57,371

30.90

1,772,764

.966682

55,460

5,823

Reformer Feed

99,707

30.90

3,080,946

.966682

96,386

10,121

Raffinates

168,112

29.65

4,984,521

.927577

155,938

16,374

Jet Fuel

172,092

29.85

5,136,946

.933834

160,707

16,874

Total

537,482

$16,493,241

515,983

$54,178

Class III Crude Consumed 515,983 x $.105 = $54,178

Volumetric Gain 21,499

Avg. Value/Barrel Crude Consumed=$31.965

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (estimated)

Total value

Relative value factor

Feedstock distrib.

Liq. duties

Week 4:

Motor Gasoline

21,905

$32.85

$719,579

1.027237

22,502

$2,363

Total Alkylate

22,552

38.75

873,890

1.211733

27,327

2,869

Heavy Reformate

58,116

29.60

1,720,234

0.925607

53,791

5,648

Reformer Feed

101,058

29.40

2,971,105

0.919353

92,908

9,755

Raffinates

169,823

30.15

5,120,163

0.942806

160,110

16,812

Jet Fuel

171,493

31.05

5,324,858

0.970949

166,511

17,484

Total

544,947

$16,729,829

523,149

$54,931

Class III Crude Consumed 523,149 x $.105 = $54,931

Gain 21,798

Avg. Value/Barrel Crude Consumed=$31.979

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (estimated)

Total value

Relative value factor

Feedstock distrib.

Liq. duties

Week 5:

Motor Gasoline

8,990

$37.25

$334,878

1.136260

10,215

$1,073

Total Alkylate

9,984

45.10

450,278

1.375713

13,735

1,442

Heavy Reformate

25,351

31.50

798,557

0.960864

24,360

2,558

Reformer Feed

43,492

31.35

1,363,474

0.956288

41,592

4,367

Raffinates

75,172

29.95

2,251,401

0.913583

68,677

7,211

Jet fuel

75,795

30.56

2,316,295

0.932190

70,654

7,418

Total

238,784

$7,514,883

229,233

$24,069

Class III Crude Consumed 229,233 x $.105 = $24,069

Gain 9,551

Avg. Value/Barrel Crude Consumed=$32.783

As provided in the regulations, the refiner files an amended CF 7501, or its electronic equivalent, for each week based on the refiner's actual weighted average values for the month, as shown below.

Product

Value/ barrel (MBBLS)

Month End:

Motor Gasoline․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

$35.27

Total Alkylate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

41.84

Heavy Reformate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

30.66

Reformer Feed․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

30.54

Raffinates․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

29.69

Jet Fuel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

30.42

Reconciliation of Week 1 Using Month's End Actual Weighted Average Values

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (wt. avg.)

Total value (2)x(3)

Relative value factor (3)/(8)

Feedstock distri. (5)x(2)

Liq. duties (6)x(10)(9)

Motor Gasoline

19,977

$35.27

$704,589

1.095716

21,889

$2,298

Total Alkylate

22,907

41.84

958,429

1.299823

29,775

3,126

Heavy Reformate

58,164

30.66

1,783,308

.952499

55,401

5,817

Reformer Feed

100,279

30.54

3,062,521

.948771

95,141

9,990

Raffinates

170,293

29.69

5,055,999

.922365

157,072

16,493

Jet Fuel

168,433

30.42

5,123,732

.945043

159,176

16,713

Total

540,053

$16,688,578

518,454

54,437

(9)

(10)

Class III Crude Consumed = 518,454 x $.105 = $54,437

Volumetric Gain 21,599

Avg. Value/Bbl Crude Consumed = $16,688,578 ÷ 518,454 = $32.189 (8)

Note:  No change in amended total duties, because duty is computed on total quantity of class III crude used. The difference is amongst the various products, i.e., estimated weekly CF 7501, or its electronic equivalent, duties paid for Motor Gasoline was $2,317, while the reconciled amount as shown above is $2,298. Additional duties owed or refunds due would depend on the reconciliation of the weekly entry as an entirety.

VII. Weekly entry, monthly manufacturing period, relative values calculated on prior manufacturing period's actual weighted average values. The prior period (PP) values are set forth below:

Product

Value/Barrel (wt. avg.)

Motor Gasoline․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

§ 35.28

Total Alkylate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

41.90

Heavy Reformate․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

31.78

Reformer Feed․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

30.02

Raffinates․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

31.10

Jet Fuel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․

28.80

Thereafter, the information provided or both the CF 3461, or its electronic equivalent, and CF 7501, or its electronic equivalent, filed for each weekly entry with respect to relative values would remain the same. The only estimated amount would be the quantity to be removed on the CF 3461, or its electronic equivalent, as shown below. On the CF 3461, or its electronic equivalent, the refiner estimates the following shipments and uses a prior manufacturing period's actual weighted average values.

1

2

3

4

Product

PF shipments (mbbls)

Value/barrel (PP) (wt. avg.)

Total value

Week 1

Motor Gasoline

20,000

$35.28

$705,600

Total Alkylate

25,000

41.90

1,047,500

Heavy Reformate

60,000

31.78

1,906,800

Reformer Feed

110,000

30.02

3,302,200

Raffinates

200,000

31.10

6,220,000

Jet Fuel

200,000

28.80

5,760,000

Total

615,000

18,942,100

Attributed Feedstock—Class III Crude:  615,000 @ $.105 = $64,575 (estimated duties)

On the CF 7501, or its electronic equivalent, the refiner reports the following shipments and uses a prior manufacturing period's actual average values.

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (PP)(wt. avg.)

Total value (2)x(3)

Relative value factor (3)/(8)

Feedstock distri (5)x(2)

Liq. duties (6)x(10)(9)

Week 1:

Motor Gasoline

19,977

$35.28

$704,789

1.097219

21,919

$2,902

Total Alkylate

22,907

41.90

959,803

1.303104

29,850

3,134

Heavy Reformate

58,164

31.78

1,848,452

.988368

57,486

6,036

Reformer Feed

100,279

30.02

3,010,376

.933632

93,623

9,830

Raffinates

170,293

31.10

5,296,112

.967220

164,710

17,295

Jet Fuel

168,433

28.80

4,850,870

.895689

150,863

15,840

Total

540,053

$16,670,402

518,451

$54,437

(9)

(10)

Class III Crude Used 518,451 x $.105 = $54,437

Volumetric Gain 21,602

Avg. Value/Barrel Crude Used = $16,670,402 ÷ 518,451 = $32.154 (8)

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (PP)(wt. avg.)

Total value

Relative value factor

Feedstock distri.

Liq. duties

Week 2:

Motor Gasoline

20,651

$35.28

$728,567

1.096128

22,636

$2,377

Total Alkylate

23,435

41.90

981,926

1.301808

30,508

3,203

Heavy Reformate

59,819

31.78

1,901,048

.987386

59,064

6,202

Reformer Feed

101,167

30.02

3,037,033

.932704

94,359

9,908

Raffinates

172,317

31.10

5,359,059

.966259

166,503

17,483

Jet Fuel

165,291

28.80

4,760,381

.894799

147,903

15,529

Total

542,680

16,768,014

520,973

54,702

Class III Crude Used 520,973 x $.105 = $54,702

Volumetric Gain 21,707

Avg. Value/Barrel Crude Used=$32.186

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (PP)(wt. avg.)

Total value

Relative value factor

Feedstock distri.

Liq. duties

Week 3:

Motor Gasoline

18,689

$35.28

$659,348

1.099168

20,542

$2,157

Total Alkylate

21,511

41.90

901,311

1.305418

28,081

2,948

Heavy Reformate

57,371

31.78

1,823,250

.990124

56,803

5,964

Reformer Feed

99,707

30.02

2,993,204

.935290

93,254

9,792

Raffinates

168,112

31.10

5,228,283

.968938

162,889

17,103

Jet Fuel

172,092

28.80

4,956,250

.897280

154,414

16,214

Total

537,482

16,561,646

515,983

54,178

Class III Crude Used 515,983 x $.105 = $54,178

Volumetric Gain 21,499

Avg. Value/Barrel Crude Used=$32.097

15

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (PP)(wt. avg.)

Total value

Relative value factor

Feedstock distri.

Liq. duties

Week 4:

Motor Gasoline

21,905

$35.28

$772,808

1.097390

24,038

$2,524

Total Alkylate

22,552

41.90

944,929

1.303306

29,391

3,086

Heavy Reformate

58,116

31.78

1,846,926

.988522

57,447

6,032

Reformer Feed

101,058

30.02

3,033,761

.933777

94,365

9,908

Raffinates

169,823

31.10

5,281,495

.967371

164,281

17,250

Jet Fuel

171,493

28.80

4,938,998

.895829

153,627

16,131

Total

544,947

16,818,917

523,149

54,931

Class III Crude Used 523,149 x $.105=$54,931

Volumetric Gain 21,798

Avg. Value/Barrel Crude Used=$32.149

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (PP)(wt. avg.)

Total value

Relative value factor

Feedstock distri.

Liq. duties

Week 5:

Motor Gasoline

8,990

$35.28

$317,167

1.097698

9,868

$1,036

Total Alkylate

9,984

41.90

418,330

1.303671

13,016

1,367

Heavy Reformate

25,351

31.78

805,655

.988799

25,067

2,632

Reformer Feed

43,492

30.02

1,305,630

.934039

40,623

4,265

Raffinates

75,172

31.10

2,337,849

.967642

72,740

7,638

Jet Fuel

75,795

28.80

2,182,896

.896080

67,919

7,131

Total

238,784

7,367,527

229,233

24,069

Class III Crude Used 229,233 x $.105 = $24,069

Volumetric Gain 9,551

Avg. Value/Barrel Crude Used=$32.14

At the end of the month, the refiner must calculate its actual weighted average values for use in the subsequent period.

Reconciliation of Relative Value for the Subsequent Period

1

2

3

4

5

6

7

Product

PF shipments (mbbls)

Value/barrel (PP)(wt. avg.) actual

Total value (2)x(3)

Relative value factor(3)/(8)

Feedstock distri. (5)x(2)

wt. avg. duties (6)x(10)(9)

Month End:

Motor Gasoline

90,212

$35.27

$3,181,777

1.095682

98,844

$10,379

Total Alkylate

100,389

41.84

4,200,276

1.299783

130,484

13,701

Heavy Reformate

258,821

30.66

7,935,452

.952470

246,519

25,885

Reformer Feed

445,703

30.54

13,611,770

.948742

422,857

44,400

Raffinates

755,717

29.69

22,437,238

.922336

697,025

73,188

Jet Fuel

753,104

30.42

22,909,424

.945014

711,694

74,726

Total

2,403,946

74,275,937

2,307,423

242,279

(9)

(10)

Class III Crude Used 2,307,423 x $.105 = $242,279

Volumetric Gain 96,523

Avg. Value/Barrel Crude Used=$74,275,937÷2,307,423=$32.19 (8)

Note:  Actual monthly reconciliation data could result in attributions on a product basis that are less than or greater than weekly distributions. This is due to the “weighing” of the data i.e., motor gasoline on a weekly basis was $10,996 as compared to $10,379 as above. No additional duties are due to the averaging.

Cite this article: FindLaw.com - Code of Federal Regulations Title 19. Customs Duties 19 CFR Pt. 146, App. Appendix to Part 146—Guidelines for Determining Producibility and Relative Values for Oil Refinery Zones - last updated October 03, 2022 | https://codes.findlaw.com/cfr/title-19-customs-duties/cfr-pt-19-146-app.html


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