Economist Says Oil Reserve Release Could Save Massachusetts Drivers 25 Cents A Day
BOSTON (CBS) – Twenty-five cents a day: that's how much money the average driver will likely save on gas because of the federal government's plan to release oil from reserves, according to Boston University Questrom School of Business Economist Jay Zagorsky.
President Biden announced Thursday that the government will release one million barrels of oil from the US reserves a day for the next 180 days, in an effort to combat expensive gas prices.
Compare that to the 20 million barrels of oil a day consumed in the country, and Zagorsky says the impact will be small. "Here in Massachusetts, we use on average, a typical person, 1 gallon of gasoline a day," he explained.
Once Biden made his announcement, oil prices dropped by about 6%. The average price of a gallon of gas in Massachusetts is $4.22. That means the translation is roughly $0.25 saved per gallon.
Since the average driver in Massachusetts uses about a gallon a day, that's about $0.25 savings a day, or $45 in the next 180 days.
"The best thing is for the war [in Ukraine] to end quickly for gas prices to come down," Zagorsky explained.
Without a resolution to the war, gas prices won't drop quickly.
The other existing options for relief include a federal and state gas tax holiday, which would save drivers about $0.42 a gallon. However, it would also take millions of dollars away from the fund used to repair roads, potentially creating expensive issues down the road for drivers.