The Biden administration is reportedly considering ordering an emergency withdrawal from heating oil reserves in the Northeast in a bid to bring down record diesel prices.
The administration could deliver up to a million barrels of ultralow sulfur diesel into the fuel-hungry marketplace if it were to completely draw down the Northeast Home Heating Oil Reserve, although how many barrels are under consideration for release was not revealed.
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The White House, however, has "teed up this reserve option to stay ahead of the problem," an unnamed official told Reuters.
The news follows weeks of record-breaking prices for both diesel and gasoline. The national average price of gasoline reached a new high on Monday of $4.596 per gallon. For diesel, the record of $5.577 per gallon was set on May 18.
Diesel's rise has been especially acute in the Northeast. Retail diesel prices there have risen 78% since January, the highest rate of any region in the country, according to the Energy Information Administration.
New England’s average retail diesel price was $6.43 per gallon on May 16, and the central Atlantic region’s average price was just behind, at $6.36 per gallon.
The EIA noted that a shortage of refining capacity in the regions is setting them back more than some others, although a loss of refining capacity is a problem nationwide.
In 2021, total U.S. refining capacity fell by nearly 560,000 barrels per day compared to the year before, according to the EIA. Total capacity hit a record 18.8 million bpd in 2019.
President Joe Biden has already leaned on a separate stockpile, the Strategic Petroleum Reserve, on three occasions to try to blunt fuel prices.
Most recently, Biden on March 31 ordered 1 million barrels of oil to be released from the Strategic Petroleum Reserve each day for six months. That 180 million-barrel release is the largest ever ordered.
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The decision reportedly frustrated fellow members of the International Energy Agency, an intergovernmental energy policy-focused body that typically coordinates global stockpile releases, because the administration went it alone.
The Northeast Home Heating Oil Reserve, which was created under former President Bill Clinton in 2000, has only been opened once before. Former President Barack Obama declared a supply interruption after Hurricane Sandy, leading to the release of 120,000 barrels from the Northeast Home Heating Oil Reserve.