Gas prices have been climbing for months. Now they are pushing inflation to levels not seen in four decades. On April 12, the government reported consumer prices jumped 8.5 percent in March from a year earlier. More than half of that increase came from higher gasoline costs.
That same day, President Joe Biden stood in Menlo, Iowa, and announced a plan to waive rules restricting ethanol blending in gasoline. The move is small in scale. It will affect only about 2,300 gas stations out of more than 100,000 nationwide. Most of those stations are in the Midwest and the South, including Texas, according to industry sources. Senior administration officials said the waiver could save drivers about 10 cents per gallon at those locations.
The Environmental Protection Agency will issue an emergency waiver. It allows the widespread sale of a 15 percent ethanol blend, known as E15. That blend is normally banned between June 1 and September 15 because of concerns it contributes to smog during hot weather.
This is not a sweeping solution. It is a targeted response to a painful reality. Gas prices have become the dominant driver of inflation. And inflation has become a dominant political problem for Biden and fellow Democrats heading into the 2022 midterm elections.
The president called the inflation report “Putin’s price hike.” He tied rising costs directly to Russia’s war in Ukraine and its effect on global energy markets. “Your family budget, your ability to fill up your tank, none of it should hinge on whether a dictator declares war and commits genocide a half a world away,” Biden said.
The administration has also started releasing 1 million barrels of oil per day from the nation’s strategic petroleum reserve. That release will continue for six months. Officials said it has helped to slightly reduce gas prices in recent days.
But the broader picture remains stark. Inflation at 8.5 percent is the highest in 40 years. Every trip to the pump reminds voters of that fact. The ethanol waiver is a small gesture against a large problem.
Iowa, where Biden made the announcement, is the nation’s top corn producer. It is also a state where ethanol politics run deep. The waiver gives corn growers and ethanol producers a win. It gives consumers a modest break at a limited number of pumps. It gives the administration something to point to when voters ask what is being done.
Whether any of it matters politically depends on whether prices actually come down. The waiver affects only a fraction of the nation’s gas stations. The strategic reserve releases are temporary. The war in Ukraine shows no sign of ending. Global energy markets remain volatile.
The administration is trying to show it is acting. The ethanol waiver is one piece of that effort. It is not a fix. It is a step. And it is a step taken against a backdrop of 40-year-high inflation, a war in Europe, and an election year.
