Newsbiden
May 22, 2024 10:07 AM EDT
In an effort to lower gas costs this summer, the Biden administration said on Tuesday that it is releasing one million barrels of gasoline from a Northeast reserve created during Superstorm Sandy.
The sale will occur in lots of 100,000 barrels at a time, with storage facilities in Maine and New Jersey. According to the Energy Department, the strategy would establish a competitive bidding procedure that guarantees gasoline can be delivered to nearby stores in time for the July 4th holiday and sold at competitive pricing.
Congress ordered the sale and closure of the 10-year-old Northeast Reserve, and the agency stated that this action was meant to assist in "lower costs for American families and consumers." To prevent a partial government shutdown, Congress adopted a funding agreement that contained the phrase in March.
The sale of one million barrels, or roughly 42 million gallons, was scheduled, according to the Energy Department, to ease the burden on drivers as the summer travel season gets underway.
According to AAA, the national average price of gasoline is $3.60 per gallon, an increase of 6 cents over the previous year. One of the few independent steps a president may take to attempt to rein in inflation, a problem for the party in power during an election year, is to tap fuel stockpiles.
The largest-ever investment in renewable energy and unprecedented releases from the Strategic Petroleum Reserve are only two of President Joe Biden's initiatives "to lower gas and energy costs," according to White House Press Secretary Karine Jean-Pierre. The release of gas from the Northeast reserve follows these initiatives.
Read also:Biden's New Move: Up to $20,000 in Student Loan Interest Wiped Clean
Following Russia's invasion of Ukraine in 2022, Biden drastically reduced the Strategic Petroleum Reserve, bringing the stockpile down to its lowest level since the 1980s. Republicans complained that the Democratic president was politicizing a reserve intended for emergencies. Still, the election year measure helped stabilize gas prices that had increased following the war in Europe.
Since then, the Biden administration has been adding to the oil store, which, as of last week, had more than 367 million barrels of crude oil. This is the world's greatest emergency crude oil supply, but slightly less than before the Russia-Ukraine war.
According to the Energy Department, the 42 million gallon reserve must be moved or delivered for the Northeast sale by June 30 at the latest.
The Northeast reserve was started by former President Barack Obama, but Congressional Republicans have long opposed it, claiming that Congress should have been in charge of creating any such stockpile. According to a Government Accountability Office assessment from 2022, the gasoline reserve-which has never been used-would only slightly alleviate the effects of a catastrophic shortage. Upkeep of the reserve comes at a cost of around $19 million annually.
Related article:Biden Aims to End Debt Spiral with Drastic Overdraft Fee Cut
The content provided on MoneyTimes.com is for informational purposes only and is not intended as financial advice. Please consult with a professional financial advisor before making any investment decisions.