The Energy Department's Office of Petroleum Reserves said contracts have been awarded for the sale and liquidation of 1 million barrels, or 42 million gallons, of gasoline in the Northeast Gasoline Supply Reserve located in the New York Harbor area and South Portland, Maine.
The sales were "strategically timed and structured," according to DOE, to "maximize the impact of this release on gasoline prices, helping to lower prices at the pump as Americans hit the road this summer"
Specifically, nine northeast states -- Pennsylvania, Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York and New Jersey -- will soon see lower prices at the gas pump this week for the Fourth of July travel blitz, Energy Department said Tuesday.
"The Biden-Harris Administration continues to take strategic action to lower prices for American consumers in every aspect of their lives -- especially as summer driving season ramps up," Energy Secretary Jennifer Granholm said.
This year's Fourth of July travel period is on track to be the busiest and the hottest yet. The projected number of travelers for the Saturday before and Sunday after Independence Day on Thursday is a 5% increase from 2023 and 8% up from 2019, according to AAA.
The Energy Department said the reserves were to be liquidated and released no later than Sunday this week in order to hit the northeast market to mitigate spikes in gas prices.
Granholm said by releasing this reserve before July 4, "we are ensuring sufficient supply flows to the Northeast at a time hardworking Americans need it the most."
After 19 requests for proposal, the awarded contracts were given to five companies with barrels sold at an average price of $2.34 per gallon to: BP; George E. Warren LLC of Vero Beach, Fla.; Freepoint Commodities based in Stamford, Conn; Irving Oil, a privately-owned Canadian company, and Vitol, a multinational company like BP.
Altogether, AAA predicts nearly 71 million people will travel 50 miles or more for this year's Fourth, over 60 million of which will travel by car, a nearly 5% increase from last year where it expected slightly more than 50 million people in the United States would travel more than 50 miles during the holiday.
In addition to supply-and-demand, a multitude of factors go in to what finally determines the price of gas, according to the U.S. Energy Information Administration.
"Gas prices have come down nearly 20 cents in the last two months, but we know there is more to do," National Economic Advisor Lael Brainard stated Tuesday.
And according to AAA, Gas prices also are now lower than this time last year when the national average was $3.53 per gallon and are expected to keep shrinking up to Independence Day.
"This release will help lower prices at the pump, building on other actions by President Biden, including historic releases from the Strategic Petroleum Reserve, record energy production, and the largest-ever investment in clean energy," said Brainard.
The cost of doing business by individual gas retailers will vary depending on where a fueling station is located as federal, state and local government taxes contribute to the overall price of gasoline at the pump, and, along with distribution, marketing and other external factors to reach a profit are what drive the retail price of gasoline.
By the end of June last year, AAA put the national average retail price at $3.54 for a gallon of regular unleaded gasoline, down from the $3.58 average by that point in May 2023 as the price of gas remained arguably stable.
However, about this time in 2022, President Joe Biden called on Congress to suspend the federal gas tax for three months to save consumers 18 cents a gallon as California had the nation's most expensive gasoline at $6.24 per gallon, followed by Hawaii, Alaska and Nevada that was averaging $5.51.
Meanwhile, southern states like North Carolina saw the least expensive gas around this time two years ago at $4.29 per gallon followed by Georgia, Mississippi and Louisiana which was at $4.35 a gallon.
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