WASHINGTON — Although the price for a gallon of diesel fuel dropped slightly this week, the White House is considering an emergency declaration to release diesel from a stockpile in an effort to address a supply shortage and to help prices further drop, an administration official said on Monday.
According to the Energy Information Administration, the average price for a gallon of diesel dropped to $5.571 per gallon on Monday. That’s down from $5.623 a gallon on May 5.
U.S. President Joe Biden has said that tackling high inflation and gas prices is the priority of his administration ahead of congressional elections in November. Republicans seeking to regain control of Congress have used the surge in prices to bludgeon Democrats.
Diesel is essential for the U.S economy, powering farms and the construction sector along with the trucks, trains and boats that help move goods. Rising diesel prices will help drive up inflation, which has hit 40-year highs.
The White House is considering tapping the Northeast Home Heating Oil Reserve, created in 2000 to help with supply issues and used only once in 2012 in the wake of Hurricane Sandy. The impact from such a release would be limited by the relatively small size of the reserve, which only contains 1 million barrels of diesel.
“We have teed up this reserve option to stay ahead of the problem, and will not hesitate to use other levers at our disposal to support families and the recovery,” a White House official said.
The situation is even worse in the U.S. Northeast, where a number of refineries have shuttered since 2000, according to a report from Reuters. For instance, the average price for a gallon of diesel in New York state is $6.52 a gallon, up 102% from a year ago, according to AAA.
U.S. distillate stocks hit their lowest level since 2005 two weeks ago and currently sit at 105.3 million barrels, while stocks on the U.S. East Coast hit an all-time low as of May 6 before rebounding in the most recent week to 22.5 million barrels, according to the latest federal data.
“We need all the help we can get. I know people mock the phrase ‘Putin’s price increase,’ but we have a supply disruption on our hands because of the Russia-Ukraine war,” John Kilduff, a partner at Again Capital LLC, referring to an argument Democrats have made that blames higher fuel prices on Russian President Vladimir Putin’s invasion of Ukraine, told Reuters.
“Exports of distillate fuels have been at very high levels, so it’s pretty clear we’re all in this together globally. It’s time to tap them,” Kilduff said.
The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.