Biden proposes a plan to reduce fuel costs, but with conditions attached.
Over 44 million Americans are estimated to leave their hometowns this summer during Memorial Day, propelling a record number of road trips, with gas prices possibly going up due to the high demand. The Biden administration recently announced plans to sell one million barrels of gasoline from a previously unused emergency stockpile called the Northeast Gasoline Supply Reserve to maintain a steady supply in the Northeast during the peak holiday travel season.
Commenting on the upcoming release, Energy Secretary Jennifer Granholm said in a statement, "By strategically releasing this reserve between Memorial Day and July 4th, we are making certain there is an adequate supply in the tri-state and the northeast when Americans need it most."
However, oil market experts claimed that the impact of this strategic move would likely be insignificant in lowering gas prices. It was, in fact, a directive from Congress earlier this year.
"This release isn't going to make any difference for drivers. It will help empty out a reserve that was unpractical to use," remarked Patrick DeHaan, an analyst at GasBuddy.
Despite selling one million barrels of gas sounding like a significant amount, the US consumed almost 9 million gasoline barrels per day last year, as per the US Energy Information Administration. In simple terms, the release will only cover a minuscule portion of a single day's demand.
Furthermore, the Northeast Gasoline Supply Reserve was established by then-President Obama in response to Superstorm Sandy in 2012, which caused severe damage to several oil refineries in the Northeast, leading to gas stations running out of fuel for weeks. The reserve contains gasoline stocks in New York and Maine.
Biden has used other US-owned oil reserves during his presidency before. Following Russia's invasion of Ukraine in 2022, Biden and his international allies released a combined total of 180 million barrels of oil. At the time, Biden stated that the measure would function as a "wartime bridge" until oil production returned to normal post-pandemic.
Tom Kloza, who is the global head of energy analysis at the Oil Price Information Service, cautioned that if the Biden administration tried to claim credit for the recent drop in oil prices, it could face repercussions if prices shot up this summer.
"Presenting this sale as an attempt to save money for consumers might result in blame if prices increase during the summer months," Kloza offered. While Kloza anticipates no sudden spike in oil prices, he regarded it as a possibility if warm summer temperatures cause refineries to close or operate more slowly, triggering a price hike.
Yes, gas prices have been relatively stable in recent weeks. The current average for regular gas stands at $3.61 nationwide, slightly higher than the yearly average but far less than the average prior to Memorial Day in 2021 at $3.54 per gallon and two years ago when the national average rose above $4.50 a gallon.
- Matt Egan of CNN contributed to the reporting.
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Source: edition.cnn.com
