The Trump administration is tapping an emergency reserve of diesel set aside to heat homes in the US Northeast, as fuel prices surge weeks before the midterm elections. The Energy Department plans to loan 315,000 barrels from the 1-million-barrel Northeast Home Heating Oil Reserve, according to a statement on Wednesday, with deliveries scheduled to be completed by November 13, Bloomberg reported via Rigzone.
Source: Bloomberg, via Rigzone
The average price of diesel, which has hit record highs during the Iran war, is about $6.32 a gallon, according to AAA figures cited by both TT News and Bloomberg. Energy Department data released October 19 put the national average retail diesel price at $6.276 a gallon, up almost 10 cents in a single week and roughly $2.66 higher than a year ago. For a trucker filling a 150-gallon tank, $6.32 a gallon means about $948 at the pump (yaani: roughly $950 every full fill-up).
Source: Transport Topics (TT News)
A reserve built for Northeast winters
'This is a temporary measure to solve a temporary supply disruption,' Energy Secretary Chris Wright said in the statement. The reserve, created under former President Bill Clinton, is held in commercial storage facilities across the Northeast and is designed to provide the region about 10 days of supply — roughly the time it takes ships to bring additional heating oil from the Gulf of Mexico to New York Harbor, the Energy Department says. It was last used in the aftermath of Hurricane Sandy in 2012, to fuel emergency responders in New York and New Jersey, and after snowstorms the same year.
Source: Bloomberg, via Rigzone
About 4 per cent of US households use heating oil, including in Maine, New Hampshire and Alaska — all politically competitive states. Wright also used the statement to urge the governors of New York and the New England states to approve a proposed pipeline, backed by the administration, to bring more natural gas to the region. TT News noted the administration last year proposed selling the reserve outright, a sale the Energy Department estimated would raise about $100 million (yaani: roughly 10 crore dollars).
Source: Transport Topics (TT News)
What is solid
- The Energy Department announced on Wednesday (October 21) a plan to loan 315,000 barrels from the 1-million-barrel Northeast Home Heating Oil Reserve, with deliveries to be completed by November 13.
- US diesel averages about $6.32 a gallon (AAA), near record highs reached during the Iran war.
- Energy Secretary Chris Wright described the loan as 'a temporary measure to solve a temporary supply disruption.'
What is only claimed
- Whether a 315,000-barrel loan — under a third of the reserve — will measurably lower pump prices is unproven; analysts have not yet published estimates, and the department has framed the move as bridging a supply disruption rather than a price cut.
- The reserve is a heating-oil stockpile for the Northeast, not a national diesel stockpile; its direct effect outside the Northeast heating market is indirect.
For Punjabi and Indian truckers across the US — for whom diesel is the single biggest running cost — the move is a sign of how far the administration is willing to go on fuel prices before the midterms, even if the loan itself is small next to daily US diesel consumption. Prices at the pump in the coming weeks will show whether it is more than a signal.