The Biden administration announced Tuesday that it will sell 1 million barrels of gasoline from the Northeast Strategic Reserve in the coming weeks. The move is said to be a measure to keep gasoline prices down for consumers ahead of the July 4th holiday.
The sale of government holdings is required by a spending bill passed by Congress in March and will ultimately result in the closure of the sanctuary, which has facilities in the New York Harbor area and Maine. The gasoline will be allocated in quantities of 100,000 barrels and sold through a competitive bidding process, with timing between Memorial Day and Independence Day to “maximize the impact on gasoline prices,” according to a Department of Energy announcement. “It was designed to be
“The Biden-Harris administration is focused on lowering prices for American households, especially as drivers head out for the summer driving season,” Department of Energy Secretary Jennifer M. Granholm said in a statement. ” he said.
As a practical matter, this move is unlikely to have a significant impact on gasoline prices. Even 1 million barrels (about 42 million gallons) is only a fraction of the total amount of gasoline used in the United States and even the Northeast. In just one day.
Last year, the United States consumed an average of about 9 million barrels of gasoline a day, according to the Energy Information Administration, a division of the Department of Energy. The Northeast and Mid-Atlantic regions accounted for about 2.5 million barrels, according to an analysis by Washington-based research firm Clearview Energy Partners.
President Biden has shrunk energy reserves in the past, without prompting from Congress, with the goal of bringing prices down in one fell swoop.
Shortly after Russia invaded Ukraine in 2022, the White House announced plans to withdraw funds from the Strategic Petroleum Reserve and authorize the sale of more than 100 million barrels of oil to stabilize gasoline prices. The Energy Department has been gradually replenishing reserves this year, but canceled plans to buy 3 million barrels last month after soaring prices.
“This builds on President Biden's other actions to reduce gas and energy costs, including historic releases from the Strategic Petroleum Reserve and the largest-ever investment in clean energy,” White House press secretary Karine Jean-Pierre said in a statement.
New England Gasoline Reserves was established in response to energy shortages caused by Hurricane Sandy in October 2012. However, the practical value of reserves is limited due to limited shelf life of gasoline and other factors.
Gasoline demand tends to peak in the summer when people travel and drive long distances.
Gasoline prices have stabilized in recent weeks, largely due to the recent decline in oil prices, with the average price on Tuesday falling to about $3.60 a gallon from $3.67 a month ago, according to AAA data.
The main reason for the price decline is that forecasters believe global oil demand will be weaker this year than previously expected. It also eased traders' fears that the war in Gaza would cause major disruptions to oil supplies from the Middle East.
Vikas Bajaj and brad plummer Contributed to the report.