# 30 CFR § 1206.56: What general transportation allowance requirements apply to me? > Federal · Regulations · In force URL: https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.56 ## Section - **Citation:** 30 CFR § 1206.56 - **Heading:** What general transportation allowance requirements apply to me? - **Jurisdiction:** Federal - **Kind:** Regulations - **Status:** In force - **Text as of:** September 22, 2026 - **Source:** Publisher's official text - **Location:** Title 30—Mineral Resources > CHAPTER XII—OFFICE OF NATURAL RESOURCES REVENUE, DEPARTMENT OF THE INTERIOR > SUBCHAPTER A—NATURAL RESOURCES REVENUE > PART 1206—PRODUCT VALUATION > Subpart B—Indian Oil ## Text (a) ONRR will allow a deduction for the reasonable, actual costs to transport oil from the lease to the point off of the lease under § 1206.52 or § 1206.53, as applicable. You may not deduct transportation costs to reduce royalties where you did not incur any costs to move a particular volume of oil. ONRR will not grant a transportation allowance for transporting oil taken as Royalty-In-Kind (RIK). (b)(1) Except as provided in paragraph (b)(2) of this section, your transportation allowance deduction on the basis of a sales type code may not exceed 50 percent of the value of the oil at the point of sale, as determined under § 1206.52. Transportation costs cannot be transferred between sales type codes or to other products. (2) Upon your request, ONRR may approve a transportation allowance deduction in excess of the limitation prescribed by paragraph (b)(1) of this section. You must demonstrate that the transportation costs incurred in excess of the limitation prescribed in paragraph (b)(1) of this section were reasonable, actual, and necessary. An application for exception (using Form ONRR-4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for ONRR to make a determination. Under no circumstances may the value, for royalty purposes, under any sales type code, be reduced to zero. (c) You must express transportation allowances for oil in dollars per barrel. If you or your affiliate's payments for transportation under a contract are not on a dollar-per-barrel basis, you must convert whatever consideration you or your affiliate are paid to a dollar-per-barrel equivalent. (d) You must allocate transportation costs among all products produced and transported as provided in § 1206.57. (e) All transportation allowances are subject to monitoring, review, audit, and adjustment. (f) If, after a review or audit, ONRR determines you have improperly determined a transportation allowance authorized by this subpart, then you must pay any additional royalties due plus late payment interest calculated under § 1218.54 of this chapter or report a credit for, or request a refund of, any overpaid royalties without interest under § 1218.53 of this chapter. (g) You may not deduct any costs of gathering as part of a transportation deduction or allowance. ## Nearby sections - [30 CFR § 206.253 § 206.253 Coal subject to royalties—general provisions.](https://www.frixlaw.com/law-library/statutes/ecfr-30-206.253.md) - [30 CFR § 1206.10 § 1206.10 Has the Office of Management and Budget (OMB) approved the information collection requirements in this part?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.10.md) - [30 CFR § 1206.20 § 1206.20 What definitions apply to this part?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.20.md) - [30 CFR § 1206.50 § 1206.50 What is the purpose of this subpart?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.50.md) - [30 CFR § 1206.51 § 1206.51 What definitions apply to this subpart?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.51.md) - [30 CFR § 1206.52 § 1206.52 How do I calculate royalty value for oil that I or my affiliate sell(s) or exchange(s) under an arm's-length contract?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.52.md) - [30 CFR § 1206.53 § 1206.53 How do I calculate royalty value for oil that I or my affiliate do(es) not sell under an arm's-length contract?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.53.md) - [30 CFR § 1206.54 § 1206.54 How do I fulfill the lease provision regarding valuing production on the basis of the major portion of like-quality oil?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.54.md) - [30 CFR § 1206.55 § 1206.55 What are my responsibilities to place production into marketable condition and to market production?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.55.md) - [30 CFR § 1206.56 § 1206.56 What general transportation allowance requirements apply to me?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.56.md) - [30 CFR § 1206.57 § 1206.57 How do I determine a transportation allowance if I have an arm's-length transportation contract?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.57.md) - [30 CFR § 1206.58 § 1206.58 How do I determine a transportation allowance if I have a non-arm's-length transportation contract or have no contract?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.58.md) - [30 CFR § 1206.59 § 1206.59 What interest applies if I improperly report a transportation allowance?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.59.md) - [30 CFR § 1206.60 § 1206.60 What reporting adjustments must I make for transportation allowances?](https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.60.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/ecfr-30-1206.56. Check the current official text before relying on it. Not legal advice.