Biden's gasoline sale likely won't have a major impact on summer pump prices
Will Biden's Gas Sale Affect Summer Prices?
The Biden administration plans to sell 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve to potentially lower pump prices for the summer, particularly before the Fourth of July. However, market analysts believe the impact will be minimal, as the amount represents only a few hours of U.S. consumption. This sale is part of a mandate by Congress to close the reserve this year. Additionally, while gas prices have been decreasing, the upcoming hurricane season could unpredictably affect prices later in the summer.
What is the purpose of the Department of Energy selling 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve?
The Department of Energy's purpose in selling 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve is to reduce prices at the pump during the summer driving season. The sale is timed to have a maximum impact on prices, with deliveries completed before the Fourth of July holiday. However, market analysts suggest that the impact on pump prices will likely be small overall.
Why is the Biden administration choosing to close the Northeast Gasoline Supply Reserve this year?
The Biden administration is choosing to close the Northeast Gasoline Supply Reserve this year because it fulfills a mandate passed by Congress in March to close the reserve. The reserve, which was set up in 2014 in the aftermath of Superstorm Sandy, has been costing taxpayers $200 million just to maintain while the gasoline in the stockpile is only worth about $103 million. Market analysts also believe that the sale of the reserve will have a minimal impact on gasoline prices, providing only a small amount of relief in the Northeast region.