In a move aimed at mitigating rising fuel costs ahead of the Fourth of July holiday and summer driving season, the Biden administration has announced plans to release 1 million barrels of gasoline from reserves held in the Northeastern region.
Energy Secretary Jennifer Granholm stated that the strategic release of these reserves between Memorial Day and July 4th aims to ensure an adequate supply of gasoline in the tri-state area and the broader northeast when demand is high.
Gasoline futures have surged by 19% this year, driven by increases in oil prices resulting from production cuts by OPEC and concerns about potential disruptions to supplies due to geopolitical tensions, notably the conflict between Israel and Hamas. In response to mounting speculation in April, the administration considered tapping into the Strategic Petroleum Reserve in Texas and Louisiana.
The White House has emphasized its commitment to maintaining affordable gas prices, with National Economic Advisor Lael Brainard assuring last month that steps would be taken to achieve this goal.
While gas prices have slightly moderated in recent weeks as oil prices retreated from April highs, the national average stood at $3.59 per gallon on Tuesday, slightly higher than a year ago but lower than the previous month’s levels.
Retailers and terminals are expected to receive the released gasoline by June 30, with the Department of Energy facilitating a competitive bidding process to ensure maximum impact on pump prices. The gasoline will be sourced from storage facilities in New Jersey and Maine, part of the Northeast Gasoline Supply Reserve established following Superstorm Sandy in 2012.
This release of gasoline reserves comes amidst concerns about declining levels in the separate Strategic Petroleum Reserve, which saw significant drawdowns in 2022 in response to escalating energy prices following Russia’s invasion of Ukraine.
