By Timothy Gardner
WASHINGTON (Reuters) – The Biden administration will sell nearly 1 million barrels of gasoline into U.S.-managed stockpiles in northeastern states as required by law, the Energy Department said on Tuesday, effectively closing the reserve.
The department created the Northeast Gasoline Supply Reserve in 2014 after Superstorm Sandy left drivers scrambling for fuel. But storing refined fuel is more expensive than storing crude oil, so closing the reserve was included in US financing legislation signed by President Joe Biden in March.
Bids are due May 28 and the Treasury Department’s general funds will receive proceeds from the sale, the department said.
The volumes will be allocated in quantities of 100,000 barrels, with each barrel containing 42 gallons, the department said. This will ensure that gasoline can reach local retailers before the Fourth of July holiday and that it will be sold at competitive prices, he said.
“By strategically releasing this reserve between Memorial Day and July 4, we are ensuring sufficient supply flows to the Northeast at a time when American workers need it most,” Energy Secretary Jennifer Granholm said in a statement.
Companies that buy the gasoline, likely retailers and fuel terminals, will have the fuel transferred or delivered by June 30, he said. About 900,000 barrels will be sold at the reserve site in Port Reading, New Jersey, and nearly 99,000 barrels at the South Portland, Maine site.
Once the reserve is closed, the secretary of energy cannot establish any new regional reserve of petroleum products unless funding is requested in advance of an annual budget presented by the president and approved by Congress.
(Reporting by Timothy Gardner; Editing by Lisa Shumaker and Marguerita Choy)
