The White House unveiled plans Tuesday to extend the availability of higher biofuels-blended gasoline over the summer to curb soaring fuel costs and to cut reliance on foreign energy sources after the consumer price index data showed inflation at a 41-year high.
The move will allow Americans to keep buying E15, a gasoline that uses a 15 percent ethanol blend, from June 1 to September 15, in an attempt to help lower fuel expenses, which have reached an average of $4.10 per gallon in the U.S.
‘For working families—families eager to travel and visit their loved ones—that will add up to real savings,’ according to a fact sheet released on the move Tuesday morning.
Biden’s fuel announcement will coincide with the release of March’s consumer price index report as the administration tries to get ahead of more dire inflation news.
The Labor Department released on Tuesday data from March showing inflation at a near 41-year high with 8.5 percent from last year – and a 1.2 percent increase from February’s 7.9 percent inflation increase.
White House Press Secretary Jen Psaki said during Monday’s briefing that the White House expected ‘headline inflation to be extraordinarily elevated due to Putin ‘s price hike.’
Under current law, gas stations are able to sell a 10 percent ethanol blend year round, but the 15 percent mix known as E15 gasoline is usually banned for sale from the start of June through September 15 due to it’s volatility in the heat and during peak travel months. There is also some concern that E15 contributes to smog, but renewable fuel advocates dispute this claim.
The Environmental Protection Agency (EPA) is planning to issue a national emergency waiver to allow for E15 use over the summer
E15 gas can be 10 cents cheaper per gallon than conventional gas, according to a senior administration official on a background call on the announcement, but it’s unclear how much the change will affect drivers’ pocketbooks at a point where gallons are several dollars more expensive than a year ago.
The president will officially reveal the gas price-saving move during remarks at a POET Bioprocessing center in Menlo, Iowa.
The company notes on its website that this ‘bioethanol production facility produces 150 million gallons of bioethanol annually.’ POET LLC is a biofuel company headquartered in South Dakota that specializes in the creation of bioethanol.
The administration has largely messaged inflation and spiking gas prices as ‘Putin’s Price Hike’.
But a reporter pointed out at Monday’s White House briefing that rising inflation predated Putin’s war in Ukraine, which started February 24, 2022 with the initial invasion into the eastern part of the country.
Last month’s job report showed the CPI jumped up to 7.9 percent in February, the biggest hike in 40 years.
Prices for US consumers are rising at the fastest rate in nearly 41 years, the latest data released Tuesday morning shows.
The Labor Department’s consumer price index shows an increase of 1.2 percent in March from the month before, for a total of 8.5 percent gain from a year ago. This represents the largest annual gain since December 1981.
Excluding volatile food and energy, prices rose 6.5 percent from a year ago.
The Biden administration tried to get ahead of the dire inflation news by blaming Russian leader Vladimir Putin ‘s invasion of Ukraine.
The March numbers are the first time that figures fully capture the surge in gasoline prices that followed Russia’s invasion of Ukraine on February 24.
Moscow’s brutal attacks have triggered far-reaching Western sanctions against the Russian economy and have disrupted global food and energy markets. The escalation of energy prices has led to higher transportation costs for the shipment of goods and components across the economy, which, in turn, has contributed to higher prices for consumers.
Economists point out that since the economy emerged from the depths of the pandemic, consumers have been gradually broadening their spending beyond goods to include more services.
A result is that high inflation, which at first had reflected mainly a shortage of goods – from cars and furniture to electronics and sports equipment – has been gradually emerging in services, too, like travel, health care and entertainment.
Last month, Biden announced the U.S. would sell 180 million barrels of crude from the Strategic Petroleum Reserve at a rate of 1 million barrels per day starting in May, the biggest release from the stockpile since it was created in the 1970s.
The average price for a gallon of regular gasoline in the US peaked on March 11 at $4.33.
Prices now sit around $4.10 – up 44 percent from a year ago – and researchers theorize that prices will moderate as the consumer purchase rate of products like cars and appliances slows and strained supply chains manage to catch up.
While E15 is only 10 cents cheaper on average and is less ‘energy dense,’ meaning drivers would need to buy more fuel, it should still help lower fuel expenses, senior administration officials told reporters on a call previewing the announcement.
To make the change, the EPA is preparing to issue a national emergency waiver closer to June, the officials on the call said. The EPA is also considering additional action to allow for the use of E15 year-round, the White House said.
But success is not guaranteed. The courts struck down a prior bid by Biden’s predecessor, Republican Donald Trump, in 2019 to extend a waiver that allowed year-round sales of E15.
The officials previewing Biden’s announcement said his administration would us a different ‘approach’ and ‘authority’ than Trump, but did not offer details.
They also said the EPA would work with states to ensure there would be no ‘significant’ negative impact on summer air quality due to the extended sale of E15, whose use in the hottest months is restricted due to smog-related concerns.
March’s consumer price index report will be released today, as the White House braces for backlash in the face of elevated inflation.
Last month’s report showed a price increase of 7.9 per cent in February, marking the highest spike in 40 years.
The Bureau of Labor Statistics releases the monthly reports, which measure prices for goods and services Americans buy – including gasoline, milk, eggs and cell phones.
There are two versions of CPI data – a headline number, which includes all the prices consumers face, and core CPI, which excludes energy and food prices, which can be more volatile.
‘We expect a large difference between core and headline inflation, reflecting the global disruptions in energy and food markets,’ Psaki said during yesterday’s White House briefing.
‘And, of course, we know that core inflation, you know, energy – the impact of energy, of course, on oil prices, gas prices, we expect that to continue to reflect what we’ve seen the increases be over the course of this invasion.’