The White House budget proposal would liquidate about 1 million barrels of gasoline reserves created in the aftermath of Hurricane Sandy in fiscal year 2018, according to White House documents released on Tuesday.
The U.S. Northeast Gasoline Supply Reserve (NGSR) was created to minimize the impact of sudden supply interruptions, in this case due to the 2012 storm, the second-costliest hurricane in the country's history.
The gasoline reserve was established in 2014 as part of the Strategic Petroleum Reserve (SPR). It consists of gasoline blendstock and is stored in leased commercial storage terminals in Maine, Massachusetts and New Jersey.
"The NGSR has not been utilized and does not have the operational functionality that was envisioned post-Sandy. ... Because the NGSR's leased commercial storage contracts expire in early FY 2019, DOE proposes to divest the one million barrels of government-owned gasoline blendstock in FY 2018." the budget proposal says.
Sandy battered the Northeast's coast at the end of October 2012, destroying homes and buildings, closing refineries and disrupting gasoline supplies. The U.S. East Coast accounts for over a third of national consumption.
The White House budget for the fiscal year starting Oct. 1 is meant as a proposal and may not take effect in its current form. The budget also proposes to sell half of the nation's emergency oil stockpiles and open the Alaska National Wildlife Refuge to drilling.
(Reporting by Devika Krishna Kumar in New York; Editing by James Dalgleish and Jonathan Oatis)