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US to sell off strategic gasoline reserves in northeast / Photo: JEFF KOWALSKY - AFP/File
NYSE - LSE
US to sell off strategic gasoline reserves in northeast
The US Department of Energy announced Tuesday that it will sell off a million barrels of gasoline from a small strategic reserve in the northeast, paving the way for its closure.
The administration of President Joe Biden painted the move as one that would lower gas prices ahead of the summer season, when millions of Americans travel the country by car.
"By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state and northeast at a time hardworking Americans need it the most," US Energy Secretary Jennifer Granholm said in a statement.
Speaking outside a Manhattan courtroom, Donald Trump -- who is on trial for allegedly covering up hush money paid to a porn star in 2016 to hide an illicit encounter -- denounced the move as a political ploy by Biden to shore up votes ahead of November's presidential election.
However, the release of a million barrels of gasoline from the Northeast Gasoline Supply Reserve (NGSR) is likely to have little real impact on prices, given the US consumed roughly nine million barrels of motor gasoline every day last year, on average, according to the US Energy Information Administration.
The sale of a million barrels of oil from the NGSR was required as part of a bill signed into law earlier this year to fund the Department of Energy for the 2024 fiscal year, which runs until September 30.
It requires the department to deposit the proceeds from the sale of the gasoline into the Treasury, and then to close the NGSR down.
The NGSR was set up by then-president Barack Obama in 2014 to try to avoid the sort of gasoline supply issues that arose after Hurricane Sandy swept through the northeast of the country in 2012.
But the reserve, which only holds a million barrels of gasoline, has never been used, and in 2022, the nonpartisan Government Accountability Office (GAO) criticized its exorbitant annual cost to maintain in comparison to other US crude oil reserves.
The NGSR is dwarfed in size by America's gargantuan Strategic Petroleum Reserve, which currently holds almost 370 million barrels of oil, according to recently published data from the Department of Energy.
(P.Clark--TAG)
