The White House to Sell 1 Million Barrels of Gasoline. What It Means for Your Wallet.

The Biden administration plans to sell nearly 1 million barrels of gasoline just in time for the summer driving season. Don’t expect it to bring down prices at the pump much.

Energy Secretary Jennifer Granholm said Tuesday that the timing of the sale, to be completed by July 4, was made to maximize the impact on gasoline prices ahead of the heavy travel period between Memorial Day and Labor Day—which usually sees some of the highest pump prices of the year due to high demand.

Congress had mandated the Energy Department to sell the Northeast gasoline reserves and then close them as part of the bipartisan spending bill passed in March.

The reserves are tiny: The 1 million barrels of gasoline stored in Maine and New Jersey are dwarfed by the nearly 350 million barrels of crude oil stored in the U.S. Strategic Petroleum Reserves. The fuel sales aren’t expected to make a material dent in prices due to their volume.

The White House has been focused on lowering gasoline prices for consumers after Russia’s invasion of Ukraine and pandemic-era refinery closures caused price spikes that have factored into sticky monthly inflation figures. A gallon of gasoline averages $3.61, up only slightly from $3.54 a year ago, according to the AAA, but that is still about $1 higher from when President Joe Biden took office.

It has cost Congress about $190 million to maintain the reserves since they were established in 2014 after Northeast motorists struggled to find fuel in the wake of superstorm Sandy. Storing gasoline is more expensive than storing crude oil, which can be refined into gasoline.

Absent a hurricane that knocks U.S. refineries offline, the U.S. Energy Information Administration only sees gas prices rising by 10 cents a gallon this summer.

The U.S. is currently well-supplied in gasoline. Gasoline inventories are about 2% below the five-year average for this time of year, and demand has been also been moderately healthy. Gasoline product supplied, a proxy for demand, averaged about 8.9 million barrels a day over the past month, also down about 2% from the prior-year period, according to the EIA.

It’s unlikely that the Northeast will re-establish gasoline reserves in the near future, but local gasoline supplies don’t seem to be an issue.

Congress mandated that once the reserve is closed, no new regional petroleum product reserve can be established by the Energy Secretary without requesting funding in advance of an annual budget, which is submitted by the president and approved by Congress. Revenue from the sale of the Northeast reserves will be deposited to the Treasury.

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