The Biden administration on Tuesday said that it will sell and liquidate 1 million barrels of gasoline targeted for the summer travel period to help ease prices at the pump, the U.S. Department of Energy said.
The government has called for bids at no later than 11 a.m. Central time on May 28 for the solicitation of the gas, which they said will likely come from retailers and terminals. The delivery of the fuel will be delivered by June 30 to target the busy period for holiday travelers during the July Fourth holiday.
The move was geared to “maximize its impact on gasoline prices, helping to lower prices at the pump as Americans hit the road this summer,” the Department of Energy said in a statement.
“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,” U.S. Secretary of Energy Jennifer M. Granholm said in the statement. “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.”
The tri-state area includes New York, Connecticut and New Jersey, and the Northeast states are Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.
The fuel, which will amount to about 42 million gallons of gasoline, will come from the Northeast Gasoline Supply Reserve (NGSR). The sites that will source the gas will be Port Reading in New Jersey, which will release 900,000 barrels, while the rest will come from the South Portland site in Maine, which will generate about 100,000 barrels.
The government said that the gas will be allocated in quantities of 100,000 barrels.
“This approach will ensure a competitive bidding process that both fuel retailers and terminal holders can participate in—ensuring this product can flow into local retailers ahead of the Fourth of July 4 holiday and that it will be sold at competitive prices, helping lower costs for American families and consumers,” the Department of Energy said in a statement.
“Revenues from the sale will be deposited to the Treasury,” the government added.
GasBuddy, the platform that provides data on gas savings, said on Tuesday that prices are likely to stay in the mid-$3-per-gallon range throughout the summer. It forecast that between Memorial Day and Labor Day, gas prices will average $3.58 per gallon nationally.
Patrick De Haan, head of petroleum analysis at GasBuddy, was skeptical on the impact the move to release fuel from the NGSR reserve will have on prices.
“It’s not going to be very impactful, even for the region (Northeast) where the reserve is located,” he told Newsweek. “While it will have a low level impact on prices for the mid-Atlantic and Northeast, it’s more shutting down a non-vital, poorly implemented reserve that’s never been used.”
Jennifer Granholm, secretary of the U.S. Department of Energy, is shown on April 24 in Washington, D.C. Granholm’s department announced it plans to release gas reserves for sale ahead of the July Fourth holiday. Jennifer Granholm, secretary of the U.S. Department of Energy, is shown on April 24 in Washington, D.C. Granholm’s department announced it plans to release gas reserves for sale ahead of the July Fourth holiday. Anna Moneymaker/Getty Images
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