The U.S. Department of Energy’s Office of Petroleum Reserves is selling 1 million barrels--42 million gallons—of gasoline from the Northeast Gasoline Supply Reserve (NGSR), which the DOE says is timed to maximize its effect on gasoline prices, helping to lower prices at the pump ahead of the July 4 holiday as Americans travel this summer.
The Obama administration created the NGSR, a stockpile similar to the Strategic Petroleum Reserve (SPR) in the Northeast and the first federal, regional, refined petroleum product gasoline reserve, in 2012 after Superstorm Sandy made landfall in the northeastern United States and caused heavy damage to two refineries and left more than 40 terminals in New York Harbor closed due to water damage and loss of power. This left some New York gas stations without fuel for as long as 30 days.
Approximately 900,000 barrels will come from the Port Reading, New Jersey, NGSR storage site and approximately 100,000 barrels will come from the South Portland, Maine, NGSR site. The sale will liquidate the reserve. Closing the reserve was included in U.S funding legislation signed in March by President Biden, according to a Reuters report. Once the reserve is closed, the energy secretary cannot establish any new regional petroleum product reserve unless funding is requested in advance of an annual budget submitted by the president and approved by Congress, the news agency said.
The DOE will allocate the volumes in quantities of 100,000 barrels to ensure a competitive bidding process and to ensure that the product can flow to local retailers quickly, the department said. Bids for the solicitation are due no later than 11:00 a.m. Central Time on May 28. Revenues from the sale will be deposited to the Treasury.
The DOE will transfer or deliver the fuel to the retailers and terminals that purchase it no later than June 30.
“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,” said U.S. Secretary of Energy Jennifer Granholm. “By strategically releasing this reserve in between Memorial Day and July 4, we are ensuring sufficient supply flows to the Tri-State and Northeast at a time hardworking Americans need it the most.”
The Energy Department will be selling into a “well-supplied” market, Reuters said. Pump prices fell for the fourth straight week on Monday despite the run up to the Memorial Day weekend that kicks off the summer driving season. Higher refinery output and weak fuel demand this year have helped ease some of the supply constraints that U.S. consumers have faced since the pandemic, the report said. Gasoline inventories along the U.S. East Coast stood at 55.5 million barrels, 6% higher year-on-year, but around 8% below the historical average for this time of the year, it said.
Former president and 2024 Republican candidate Donald Trump said President Joe Biden is using the sale to push down retail gas prices for political purposes and “because he’s unable to drill properly,” Reuters reported. “He’s trying to stop that because high gasoline prices are not good for elections,” Trump said outside the New York courtroom where his hush-money trial is taking place, according to the report.
Meanwhile, conservative group Americans for Prosperity is hosting a series of events this week to roll back gas prices to what they were before President Biden was elected. AFP will partner with 25 gas stations in more than a dozen states to temporarily drop the price of gas to $2.38 per gallon, what it was the day Biden took office. “Each station is ready to serve between 150 and 200 cars,” the group said. “We aim to help at least 4,000 cars buy affordable gas.”
Click here for a list of stations.
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