The Energy Department plans to loan 315,000 barrels from the 1 million-barrel Northeast Home Heating Oil Reserve, according to a department statement issued Oct. 21. Deliveries are scheduled to finish by Nov. 13.
The loan arrives with US diesel averaging about $6.32 a gallon, according to AAA, after prices reached record highs during the Iran war. Energy Secretary Chris Wright described the move as a temporary measure for a temporary supply disruption.
The reserve is stored in commercial facilities across the Northeast. About 4% of US households use heating oil, including households in Maine, New Hampshire and Alaska. The reserve was drawn on after Hurricane Sandy in 2012 to fuel emergency responders in New York and New Jersey, and again after snowstorms later that year.
The reserve was created in the Clinton administration to provide 10 days of supply, roughly the time ships need to bring more heating oil from the Gulf of Mexico to New York Harbor. The Energy Department proposed selling the reserve last year, a sale it estimated would generate $100 million.
Heating oil and diesel are closely related distillate fuels, and trucking fleets face the higher cost. Fleet Advantage used a national average of $6.40 per gallon in its October truck cost index, compared with $5.47 in April. A separate Oct. 21 action from the Federal Motor Carrier Safety Administration added ethanol and heating oil to an emergency waiver covering fuel haulers.
Source: Transport Topics - https://www.ttnews.com/articles/us-tap-national-diesel-reserve-prices-soar