In a bid to reduce gasoline prices ahead of the summer driving season and the Fourth of July holiday, the Biden administration announced the release of 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve. This move is part of a broader strategy to alleviate the financial burden on American families amid rising energy costs.
"By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state [region] and Northeast at a time hardworking Americans need it the most," Energy Secretary Jennifer Granholm said in a statement on Tuesday.
Gasoline futures have surged by 19% this year, driven by rising oil prices due to OPEC production cuts and concerns that the Israel-Hamas conflict could escalate, potentially disrupting global oil supplies. Despite these pressures, gas prices have eased slightly in recent weeks, with the national average at $3.59 per gallon, according to AAA. This is about 4 cents higher than the same time last year but lower than the previous month's average.
The Department of Energy (DOE) specified that the gasoline will be released in increments of 100,000 barrels, with deliveries to be completed by June 30. This method aims to ensure a competitive bidding process, maximizing the impact on prices at the pump. The gasoline will be sold from storage sites in New Jersey and Maine, part of the reserve established after Superstorm Sandy disrupted refineries in 2012.
The decision to release gasoline from the Northeast reserve comes as the Strategic Petroleum Reserve (SPR) has reached its lowest levels in decades. The Biden administration had previously released 180 million barrels from the SPR in 2022 to combat soaring energy prices following Russia's invasion of Ukraine. Although the SPR has been partially refilled, it still holds less than its pre-invasion levels.
The release of gasoline is also a response to a Congressional mandate to sell off the Northeast reserve, included in a spending deal to avert a partial government shutdown in March. The DOE emphasized that the sale is timed to provide relief during the peak summer travel season, aiming to lower costs for American families.
"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," Granholm added.
White House Press Secretary Karine Jean-Pierre highlighted that this release builds on President Biden's efforts to lower energy costs, including historic releases from the SPR and significant investments in clean energy.
However, this move has drawn criticism from some quarters. Congressional Republicans have long argued that the Northeast reserve should have been established by Congress, not through executive action. They also contend that the reserve, which costs approximately $19 million annually to maintain, offers minimal relief during severe shortages. A 2022 Government Accountability Office report supported this view, noting that the reserve had never been tapped before.
