The White House recently celebrated a slight drop in gas prices, highlighting the lowest July 4th rates in three years. According to a projection from GasBuddy, drivers filling up their cars on the Fourth of July will encounter the “lowest holiday price” for a gallon of gas in three years. This comes amid a projected $1.30 decrease from the 2022 highs. Despite rising oil prices and the upcoming holiday, a new analysis suggests that gas prices could fall as much as 10% by the Fourth of July, thanks to declining demand and increasing supply.
The national average cost for a gallon of gas was $3.48, marking a significant eight-cent dip from the previous week. This decline is attributed to decreasing oil prices and less demand. However, states are now considering how to recoup losses from a gas tax as more cars on the road become more fuel-efficient. For instance, California has been exploring the idea of a “road charge.”
President Biden’s administration has also taken steps to lower gas prices by allowing the staggered release of one million barrels of oil from Northeast reserves. This move is part of a broader strategy to stabilize gas prices. Additionally, Americans for Prosperity partnered with gas stations across the U.S. to lower prices to $2.38 per gallon, the average when President Biden took office.
Despite these efforts, the national average cost for a gallon of gas settled at $3.61, a slight one-cent increase from the previous week. However, gas prices have maintained their decline thanks to low oil prices and demand. The national average cost for a gallon of gas declined to $3.64, a slight three-cent decrease from the previous week. Fuel costs didn’t go up by much this week due to low oil prices and a lull in demand.
The White House recently announced the completion of the sale of 1 million barrels of gasoline from the Northeast Gasoline Supply Reserve (NGSR) as part of its strategy to lower gas prices during the summer driving season. This move comes after the government revealed plans to release 42 million gallons of gas from storage facilities in Maine and New Jersey. The contracts for the sale were awarded to five companies, including BP, Vitol, Freepoint Commodities, George E. Warren, and Irving Oil, with gas reserves sold at an average price of $2.34 per gallon.
Senior administration officials have hailed this initiative as a significant step in the federal government’s efforts to combat inflation and reduce prices for American consumers. Energy Secretary Jennifer Granholm emphasized the importance of ensuring sufficient gas supply flows to the northeast, especially as demand peaks during the summer months. National Economic Advisor Lael Brainard echoed these sentiments, highlighting the need for continued actions to lower prices at the pump.
Gas prices are currently around $3.49 per gallon, down slightly from a year ago. However, concerns about rising crude oil prices could lead to an increase in gas costs in the near future. U.S. crude oil prices have surpassed $83 a barrel, marking a 17 percent increase year-to-date. While oil prices have fluctuated in recent months, various factors such as geopolitical tensions, Federal Reserve policy changes, and global energy market conditions continue to influence price movements.
The Northeast Gasoline Supply Reserve was established in 2012 following Hurricane Sandy to address regional fuel supply disruptions. President Biden has also tapped into emergency oil stockpiles to stabilize gas prices, drawing down 180 million barrels of oil since Russia’s invasion of Ukraine. The Strategic Petroleum Reserve (SPR) has played a crucial role in mitigating supply shocks and price fluctuations in response to emergencies or disruptions in global petroleum markets.
Despite fluctuations in SPR levels over the years, the White House has expressed its commitment to replenishing reserves to ensure energy security and price stability. Energy Secretary Granholm indicated that the administration could accelerate efforts to refill U.S. reserves beyond the current pace, with plans to bring all four SPR sites back online by the end of the year. This proactive approach reflects the government’s readiness to address potential energy challenges and maintain adequate fuel reserves.
In conclusion, the federal government’s recent actions to sell gasoline from the NGSR and manage the Strategic Petroleum Reserve underscore its commitment to addressing energy affordability and security concerns. By leveraging emergency measures and strategic planning, policymakers aim to stabilize gas prices, support consumer welfare, and enhance overall economic resilience in the face of evolving energy market dynamics.
Source: Various sources
