June 16, 2024

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Biden intends to release one million barrels of gasoline in an attempt to reduce prices at the stations

Biden intends to release one million barrels of gasoline in an attempt to reduce prices at the stations

WASHINGTON (AP) — The Biden administration said Tuesday it will release 1 million barrels of gasoline from a Northeast reserve created after Superstorm Sandy in an effort to lower prices at the pump this summer.

The sale, from storage sites in New Jersey and Maine, will be allocated in increments of 100,000 barrels at a time. This approach will create a competitive bidding process that ensures gasoline flows to local retailers before the Fourth of July holiday and is sold at competitive prices, the Energy Department said.

The move, which the department said was intended to help “reduce costs for American families and consumers,” follows a congressional mandate to sell and then close the 10-year-old Northeast Reserve. Language is included in a Spending deal approved by Congress in March To avoid a partial government shutdown.

The Department of Energy said the sale of 1 million barrels, or about 42 million gallons, was timed to provide relief to motorists with the start of the summer driving season.

Gasoline prices are averaging about $3.60 per gallon nationwide, up 6 cents from last year, according to AAA. Tapping gasoline reserves is one of the few measures the president can take on his own to try to control inflation, an election-year responsibility of the party that controls the White House.

“The Biden-Harris administration is laser-focused on lowering prices at the gas station for American families, especially as drivers hit the road for the summer driving season,” Energy Secretary Jennifer Granholm said in a statement. “By strategically releasing this reserve between Memorial Day and the Fourth of July, we are ensuring adequate supply flows to the Tri-State and Northeast at a time when hardworking Americans need it most.”

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White House press secretary Karine Jean-Pierre said the release of gas from the Northeast Reserve builds on actions taken by President Joe Biden “to lower gas and energy costs — including historic releases from the Strategic Petroleum Reserve and the largest investment ever in clean energy.”

Biden The strategic petroleum reserve has been significantly depleted In 2022 after the Russian invasion of Ukraine, which will cause the stock to fall to its lowest level since the 1980s. The election-year move helped stabilize gasoline prices that had been rising in the wake of the war in Europe, but it sparked complaints from Republicans that the Democratic president was playing politics with a reserve set aside for national emergencies.

The Biden administration has since Start refilling the oil reserve, which had more than 367 million barrels of crude oil as of last week. This total is lower than pre-Russian-Ukrainian war levels but still represents the largest emergency supply of crude oil in the world.

The Northeast sale will require the 42 million gallon reserve to be transferred or delivered no later than June 30, the Department of Energy said.

Republicans in Congress have long criticized the Northeast Reserve, which was created by former President Barack Obama, saying any such stockpile should have been created by Congress. A 2022 report by the Government Accountability Office said gasoline reserves, which have never been tapped, would provide minimal relief during severe shortages. The cost of maintaining the reserve is about $19 million annually.

GasBuddy analyst Patrick De Haan said the sale of Northeast reserves would have little impact on gasoline prices nationally, although “there may be slight downward pressure on prices” in the Northeast. He added that the reserve of one million barrels is equivalent to only about 2.7 hours of total gasoline consumption in the United States.

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“As an analyst, it never made sense to have that reserve,” De Haan said in an interview with The Associated Press. The reserve is very small and must be rotated frequently, “because gasoline has a shelf life,” De Haan said. “That is why no country has an emergency stockpile of gasoline other than the United States

He added that the Strategic Petroleum Reserve has much larger quantities of oil needed in emergency situations.

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AP Radio reporter Shelley Adler in Fairfax, Virginia, contributed to this story.