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Biden administration to sell 1 million barrels of gas from reserves to lower prices

The sale, mandated by Congress, comes as a record number of Americans will travel over Independence Day.
Consumber Prices
Posted at 5:35 AM, Jul 02, 2024

The Biden administration announced Tuesday it completed the sale of 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve, a move officials hope will help further bring down the cost of gas and other goods as record numbers of Americans are expected to travel surrounding the July 4 holiday.

The sale, announced by the Department of Energy in May, effectively drains the Northeast Gasoline Supply Reserve of its remaining stock. Originally created in 2014 after Hurricane Sandy left many Americans stranded without fuel, the reserve — which stored refined gasoline, as opposed to the unrefined petroleum held in the Strategic Petroleum Reserve — proved costly to maintain, and Congress ordered its liquidation in the most recent government funding agreement.

White House officials said they did not anticipate restocking it anytime soon.

“The reserve was set up for a certain period of time. We don't need it anymore. Congress agreed,” Amos Hochstein, senior adviser to the president for energy and investment, told Scripps News on Monday in an interview at the White House. “We are choosing the timing in a way that [not only] sells the reserve out, but to make sure that it affects consumers and American families the most.”

Related story: Fourth of July travel could set new record

According to AAA, nearly 71 million Americans are expected to travel on or around July 4, a record projection, up even from pre-pandemic levels. Noting that gas prices have already fallen by 20 cents in recent months. bucking past trends for this time of year, White House officials said they expected the release not only to further lower the cost of fuel but also food and consumer goods.

“There's a lot of [the] price of gasoline in the price of the food,” Hochstein said. “So when we prevent prices from going up at the pump, we're actually also preventing and helping prices of food to stabilize and come down.”

According to the Department of Energy, the barrels of gasoline were sold to five oil companies at an average price of $2.34 per gallon, and their sale is expected to particularly benefit consumers in Northeastern states, including Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey and Pennsylvania.

“By releasing this reserve ahead of July 4th, we are ensuring sufficient supply flows to the northeast at a time hardworking Americans need it the most,” Energy Secretary Jennifer Granholm said in a statement.

Tuesday’s announcement comes as former President Donald Trump continues to attack President Biden’s energy policies, blaming the president for rising costs and alleging his policies have made Americans too reliant on foreign energy sources. But domestic energy production has continued to surge under the president's tenure, not just from renewable sources but also from fossil fuels. White House officials have at times struggled with their messaging on the issue, seeking to highlight domestic production without further angering environmentalists, many of whom have repeatedly criticized Biden’s approval of new oil projects.

“We have never had more oil production in the United States than we do right now,” Hochstein said. “At the same time, we're accelerating the transition away so that we're not reliant on oil companies here in America or oil producers around the world.”

Related story: Inflation hits cookouts and pool parties this Fourth of July

The White House, meanwhile, sought to use Tuesday’s sale as another means of attacking congressional Republicans for failing to act on the president’s legislative agenda.

“While congressional Republicans haven’t offered a single proposal to lower costs, President Biden is fighting every day for hardworking families like the ones he grew up with in Scranton,” national economic adviser Lael Brainard said in a statement.