- The U.S. government is selling 42 million gallons of gasoline from a Northeast Reserve.
- The gas will be released between Memorial Day and the Fourth of July.
- The government says the release is “strategically timed and structured to maximize its impact on gasoline prices.”
The national average price of a gallon of gasoline has climbed to $3.61 per gallon, which is up from $3.54 a year ago. Prices could continue to climb as we enter the summer driving season, but help is on the way.
In particular, the U.S. Department of Energy’s Office of Petroleum Reserves has announced plans to sell 1 million barrels (42 million gallons) of gasoline from the Northeast Gasoline Supply Reserve. The government said “This solicitation is strategically timed and structured to maximize its impact on gasoline prices, helping to lower prices at the pump as Americans hit the road this summer.”
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U.S. Secretary of Energy Jennifer Granholm expanded on that by saying they’ll be strategically releasing gasoline from the reserve between May 27 [Memorial Day] and July 4. The government added bids are due on May 28 and the move will ensure “product can flow into local retailers ahead of the Fourth of July holiday and that it will be sold at competitive prices, helping lower costs for American families and consumers.”
The Northeast Gasoline Supply Reserve was created after Superstorm Sandy made landfall in 2012, causing heavy damage at two refineries. The hurricane also “left more than 40 terminals in New York Harbor closed due to water damage and loss of power,” which resulted in some New York gas stations going without fuel for as long as 30 days.
U.S. Department of Energy
The disaster pushed the Obama administration to create the first federal, regional, refined petroleum product reserve containing gasoline instead of oil. The resulting Northeast Gasoline Supply Reserve was designed to hold one million barrels of gasoline that was split between South Portland, Maine and the New York Harbor area.
While the move sounded like a smart idea at the time, Reuters noted storing gasoline is more expensive than storing crude oil. This pushed the government to move to close the Northeast Gasoline Supply Reserve and the sale of its inventory paves the way to do so.