In an effort to alleviate rising gasoline prices ahead of the Fourth of July holiday and the summer driving season, the Biden administration has announced plans to release 1 million barrels of gasoline from reserves held in the Northeast. The Department of Energy (DOE) revealed that the release will be conducted through a competitive bidding process, with retailers and terminals given the opportunity to purchase the gasoline.

The strategic timing of this release, between Memorial Day and July 4th, aims to ensure an adequate supply flow to the tri-state region and the northeast when it is most needed by hardworking Americans, according to Energy Secretary Jennifer Granholm.

Gasoline futures have experienced a 19% rally this year, driven by the increase in crude oil prices resulting from OPEC's production cuts and fears of a broader conflict in the Middle East. Rising energy costs had sparked speculations in April that the Biden administration would tap into the Strategic Petroleum Reserve located in Texas and Louisiana in a bid to address the issue before the upcoming presidential election.

However, gas prices have witnessed a decline in recent weeks as oil prices have retreated from April highs. The fear-driven surge in crude futures caused by concerns over a potential war between Israel and OPEC member, Iran, has subsided. As of Tuesday, national average gas prices stood at $3.59 per gallon, slightly higher than the previous year's average but lower than last month's figures, as reported by the motorist association AAA.

To ensure the desired impact on prices at the pump, the DOE will distribute the gasoline in quantities of 100,000 barrels, allowing for a competitive bidding process. Retailers and terminals will receive their share of the reserve no later than June 30, as stated by the DOE. The gasoline will be sourced from storage sites in New Jersey and Maine, which constitute part of the Northeast Gasoline Supply Reserve established following the refinery disruptions caused by Superstorm Sandy in 2012.

It is worth noting that this release of gasoline comes at a time when the Strategic Petroleum Reserve (SPR) has reached its lowest levels in decades. The Biden administration had already authorized the release of 180 million barrels from the SPR in 2022 due to the spike in energy prices triggered by Russia's invasion of Ukraine.

As rising energy costs continue to pose concerns for consumers, the Biden administration remains committed to ensuring affordable gas prices. By tapping into gasoline reserves and strategically timing their release, the government aims to provide relief to American drivers during the busy summer season.