For the first time in history, purchases of petroleum products and services passed the one billion dollar mark in fiscal year 1956. This represents 223 million barrels of products, 125 storage contracts, and other services related to petroleum supply.

Of the estimated procurement for fiscal year 1957 in amount of $1,037,920,000, 61 per cent will be required by the Air Force, 27.7 per cent by the Navy, and 11.3 per cent by the Army.

Purchase of military petroleum by several types of joint-purchase agencies is briefly traced from War II to the present time. Normally, petroleum is purchased by a central agency using formally advertised open-end contracts of 6 months duration, for estimated total quantities only. Approximately 5,000 contracts are awarded annually, including those for commercial storage and operation of military bulk terminals.

Within the United States, petroleum is distributed by the contractor directly to military posts, camps, stations, including air bases, on call by the using agency. For overseas distribution, tanker loads from refineries in the United States, South America, Persian Gulf, and other places are lifted by military and commercial tankers direct to the overseas bulk terminals. From these terminals it is distributed direct to using agencies by tank trucks, pipe lines, drums, and cans, in accordance with periodic requisitions.

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In each of eight logistic areas into which the world is divided, a jointly staffed area petroleum office compiles requirements, requests shipments from the purchase agency, arranges for receipt by petroleum depots, and coordinates all matters relating to petroleum in its logistic area.

On July 24, 1956, the Department of Defense designated the Secretary of the Navy as the Single Manager for Petroleum. He was directed to establish the Military Petroleum Supply Agency into

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which will be phased the Armed Services Petroleum Purchasing Agency and other miscellaneous service elements. Greater efficiency in Armed Services petroleum supply is the objective.

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