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White House Considers Emergency Diesel Release

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The White House is weighing an emergency declaration that would enable President Joe Biden to release diesel fuel from a rarely used stockpile in order to address current fuel shortages.

The decision to tap the Northeast Home Heating Oil Reserve highlights a level of concern inside The White House about record-high prices for diesel. Diesel engines power not only farm and construction equipment, but trucks that move goods across America. Skyrocketing fuel expenses will likely get passed along to American families contributing to America’s worst inflation crisis in four decades.

Diesel inventories in the Northeast have plunged to record lows because of the war in Ukraine and booming demand. “The system is definitely under strain,” said one White House official.

The diesel reserve is small and limited in supply, which means that any releases would only help to mask the problem for a couple of weeks or months at best. “It’s small potatoes. It might buy a couple of weeks or even months, but it doesn’t solve the underlying issues.” says Andy Lipow, president of Lipow Oil Associate.

Diesel prices are on a record-breaking spree. The national average price for diesel stood at $5.56 per gallon as of Sunday, just shy of the all-time high set last week, and now stands 75% higher than it was one year ago. With experts predicting that this could rise even higher by summer’s end – possibly reaching up to 10 dollars a gallon.

Diesel prices in the Northeast have been steadily increasing over recent months and continue to rise. The average price for a gallon of diesel sold at gas stations across New York is $6.52, with an updated figure from AAA coming out today which shows that it’s gone up by 102% from last year.

The Biden Administration has been alarmingly aware of the plunging inventories and soaring prices in recent months. To better understand these issues, they have conducted extensive internal briefs as well consulting with fuel retailers about what’s happening now- more than ever before! The result? They may release diesel from Northeast Home Heating Oil Reserve.

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In 2000, the reserve was created to meet a supply crunch caused by severe winter storms. In 2011 it converted from home heating oil to ultra-low sulfur distillate fuel used for powering engines in trucks and other vehicles.

The United States may soon be eyeing a potential fuel release from its reserves, according to reports emerging this week. The idea has been raised by President Joe Biden who contacted officials at the Department Of Energy (DOE) earlier in order to prepare for any developments that might come up before it becomes necessary.

The United States Strategic Petroleum Reserve is a fund that can be used in case of emergency. It currently contains 420 million barrels, but this number has decreased due to recent releases from the SPR (conducted by Joe Biden’s administration). “It’ll only last so long,” said Lipow about our diesel reserve; when you remove these band-aids they don’t heal properly.”

Diesel is the most popular fuel in America, but it’s not so easy to find these days. The shortage was caused by multiple refineries being retired and demand rebounding after the Covid-19 crash as people fly more soaring prices for jet fuels and gasoline continue stressing  an already fragile markets even further.

The European Union has been trying to punish Russia for its invasion of Ukraine, but it looks like they might be hurting themselves more than anyone else. Analysts say that an increase in US exports of diesel is due primarily to the decline at Russian refineries which produce these products.

The good news is that government statistics show distillate fuel inventories have increased by 1.2 million barrels last week, but they’re still 22% below the average for this time of year.

Tom Kloza, the head of global energy analysis at the Oil Price Information Service said that even though there were weeks where fuel could not be delivered due to a lack in supply, this has now changed. He expects us “to come out on top.”

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