he Trump administration wants to put a 1 million barrel cache of diesel fuel on the market, saying the reserve meant to provide an emergency supply of home heating oil for the Northeast has never been used for its intended purpose.
The sale and closure of the Northeast Home Heating Oil Reserve would generate $100 million to be used for deficit reduction, according to Department of Energy budget details recently made public. The sale of the reserve would require approval by Congress, which gave the Biden administration the green light to sell off and close a 1 million barrel emergency cache of gasoline last year.
Diesel futures were up as much as 3.5% on Monday, alongside a rally in oil. Diesel was up 1.9% as of 10:46 a.m. in New York.
The 1 million barrels of diesel is equal to roughly a quarter of overall US daily demand, while the US Energy Information Administration estimates that about 4% of the nation’s households use heating oil to warm their homes.
The diesel fuel reserve, which is housed in commercial storage facilities across the Northeast, was used in the aftermath of Hurricane Sandy in 2012 to provide fuel for emergency responders in New York and New Jersey, as well as in the wake of snow storms that same year, according to the Energy Department.
Created under former President Bill Clinton, the reserve is designed to provide Northeast consumers with 10 days of supply, the time required for ships to carry additional heating oil from the Gulf of Mexico to New York Harbor, according to the Energy Department.