DOE To Sell 1 Million Bbl of Gasoline From Northeast Gasoline Supply Reserve

On May 21, the U.S. Department of Energy announced a solicitation to sell 1
million bbl of gasoline held in the Northeast Gasoline Supply Reserve that is
“timed and structured to maximize its impact” on lowering prices at the gas
pump this summer.

“By strategically releasing this reserve in between Memorial Day and July 4th,
we are ensuring sufficient supply flows to the tri-state and northeast at a
time … Americans need it the most,” Energy Secretary Jennifer Granholm said in
a statement.

The Memorial Day holiday on May 27 marks the start of the summer driving
season. Gasoline prices are typically the highest during the summer due to
robust demand and more stringent fuel specifications to curb vehicle tailpipe
emissions during the hottest months.

DOE said that the awarded entities from this sale, likely made up of retailers
and terminals, will have the fuel transferred or delivered no later than June
30 ahead of the July 4 Independence Day holiday.

DOE said it will sell 900,000 bbl from the Port Reading, N.J., site and 98,824
bbl from the South Portland site in Maine, which are part of the Northeast
Gasoline Supply Reserve storage sites.

In addition, the volumes will be allocated in quantities of 100,000 bbl, which
would allow a competitive bidding process that both fuel retailers and terminal
holders can participate in, DOE said. That would ensure the additional gasoline
supply can flow into local retailers ahead of July 4 and that it will be sold
at competitive prices, it said.

In March, OPIS reported that the Northeast Gasoline Supply Reserve could be
sold off this year due to a funding bill that has now moved through Congress.

The reserve, which was created after Superstorm Sandy ravaged the region in
2012, has never been tapped but holds 700,000 bbl of gasoline in the New York
Harbor, 200,000 bbl at a Boston terminal and 100,000 bbl in South Portland,
Maine.

Original story from Oil Price Information Service, LLC; Reporting by Frank Tang, ftang@opisnet.com; Editing by Michael Kelly,
mkelly@opisnet.com