The Biden administration will release 1 million barrels of gasoline from the Northeast reserve following a congressional mandate.
The Biden administration announced on Tuesday that it will be releasing 1 million barrels of gasoline from a Northeast reserve.
The gasoline, stored in New Jersey and Maine, will be sold in increments of 100,000 barrels. The Energy Department has designed a competitive bidding process intended to ensure that the gasoline reaches local retailers in time for the July 4 holiday.
This decision follows a Congressional mandate to sell off the Northeast reserve and shut it down, a stipulation included in a spending deal approved in March to prevent a partial government shutdown. Nationwide, gasoline prices currently average around $3.60 per gallon, a 6-cent increase from the previous year, as reported by AAA.
Energy Secretary Jennifer Granholm stated, "The Biden-Harris administration is laser-focused on lowering prices at the pump for American families, especially as drivers hit the road for summer driving season."
The administration's actions come after a significant drawdown of the Strategic Petroleum Reserve in 2022 following Russia’s invasion of Ukraine, which reduced the stockpile to its lowest level since the 1980s. The administration has begun refilling the reserve, which as of the last report held over 367 million barrels of crude oil.
The Energy Department has stipulated that the 42-million-gallon reserve must be transferred or delivered by no later than June 30.
Critics, including Congressional Republicans, have questioned the efficacy of the Northeast reserve, citing a 2022 Government Accountability Office report that indicated minimal relief would be provided during a severe shortage and pointing out the $19 million annual maintenance cost. Patrick De Haan, an analyst for GasBuddy, commented that while there may be "a slight downward pressure on prices" in the Northeast, the impact on national gasoline prices is likely to be minimal.
The sale of the reserve raises questions about its overall impact, as inflation remains a pressing concern for consumers. With inflation not having receded in any month since the beginning of 2021, the material effect of this move on the broader economy is yet to be seen.
