(Bloomberg) -- The Biden administration is putting its cache of 1 million barrels of gasoline on the market, after being ordered to liquidate the reserve by Congress. 

The sale of the Northeast Gasoline Supply Reserve, equal to 42 million gallons, was announced Tuesday by the Energy Department, which said it was timed to help lower gasoline prices during the summer driving season. Gasoline futures hit a fresh session low of $2.4895 a gallon after the news. 

The reserve was authorized in 2014, two years after Hurricane Sandy damaged refineries and left terminals underwater leading some gas stations in New York to go without fuel for as long as 30 days. But the cache, kept in commercial storage terminals in Maine and New Jersey, has never been used, according to a 2022 Government Accountability Office report.

Retail gasoline prices are up about 15% this year, and experts have warned that costs could keep climbing during the busy summer travel season. 

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“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 hardworking Americans need it the most,” Energy Secretary Jennifer Granholm said in a statement. 

The product reserves cost about $13 per barrel on an annual basis for operations and maintenance, compared with roughly 30 cents a barrel for crude oil stored in the Energy Department’s Strategic Petroleum Reserve, according to the 2022 report. 

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Congress ordered the sale of the reserve in a government funding bill that became law in March. Bids for the solicitation are due by 11:00 a.m. Central Time on May 28. The fuel will be transferred or delivered no later than June 30, the Energy Department said. 

While the Biden administration said the move would lower prices at the pump, analysts have said 1 million barrels is unlikely to make a significant difference in the East Coast region which burned through more than 3 million barrels a day of gasoline last June.

 

(Adds market reaction in second paragraph, comment from energy secretary in fifth.)

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