WASHINGTON — California gasoline prices are soaring again — up more than a dollar over the last month — and the latest big congressional idea for relief involves creating an emergency oil supply that Washington would tap when prices soar.
It’s called the Economic Petroleum Reserve. Experts, however, aren’t enthusiastic, and the plan is unlikely to ease prices anytime soon.
“It’s a non-starter,” said Patrick De Haan, head of petroleum analysis for GasBuddy, which tracks price trends, of the reserve idea.
“I’m not sure this really helps the problem,” said Sanjay Varshney, professor of finance at California State University, Sacramento.
The state’s average price of gasoline keeps rising, even as the national average continues to drop or stabilize. California’s average Friday was $6.29 for a gallon of regular, up from $5.27 a month ago, according to AAA. The national average was $3.80, down about 5 cents from a month ago.
In Sacramento, the Friday average was $6.22. Other AAA readings: Modesto, $6.04, Merced, $6.10; Fresno, $6.06 and San Luis Obispo, $6.51.
The emergency reserve plan, pushed by Rep. Josh Harder, D-Turlock, House Energy and Commerce Committee Chairman Frank Pallone, D-New Jersey, and others, is called the Buy Low and Sell High Act.
Its key provision would have the federal Energy Department sell oil from the new Economic Petroleum Reserve when prices are high. It would have up to 350 million barrels of oil. The government could buy oil at prices below $60 a barrel and could then sell it when prices were higher than $90 per barrel. Crude oil is now trading at roughly $80 a barrel.
Can Congress act on prices?
The thinking is that by releasing this oil when pump prices are high, pump prices will drop somewhat. But the bill faces significant hurdles.