The Biden administration's sale of 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve is unlikely to significantly impact summer pump prices, according to analysts. The sale, aimed at mitigating regional price surges, represents only a small fraction of U.S. consumption. While gas prices have been trending lower due to softened demand and decreased oil prices, the outlook remains uncertain with an active hurricane season potentially disrupting supply.
A funding bill up for discussion at U.S. Congress proposes selling off the 1-million-barrel Northeast Gasoline Supply Reserve in fiscal year 2024 and prohibits Chinese entities from buying crude oil from the U.S. Strategic Petroleum Reserve. The bill also aims to prevent the establishment of new regional petroleum product reserves without explicit funding approval. The proposed sale follows previous releases of crude from the SPR to stabilize oil prices, and its chances of passing appear favorable given bipartisan anti-Chinese sentiments.
The US plans to sell off its entire Northeast Gasoline Supply Reserve, located in New York Harbor, Boston, and South Portland, as part of a bill to raise funds for federal departments. The reserve, established after Superstorm Sandy, has never been used and costs $16 million annually to maintain. Critics argue that shutting it down could leave the region vulnerable to supply disruptions, while supporters claim it is too small to be effective. The bill also includes provisions to prevent the sale of reserve oil to entities linked to the Chinese Communist Party and would keep non-defense spending relatively flat compared to last year.
