The nationwide average price of a gallon of gas remains above $4 — $4.10 this morning, according to AAA. President Biden has announced a plan aimed at bringing the price down.
Gasoline prices tend to go up quickly and come down slowly.
Prices soared in early March when Russia invaded Ukraine, triggering widespread sanctions and restricting the flow of many goods. They reached a record high of $4.33 per gallon on March 11 and have stubbornly come down slowly despite Americans driving less and several states enacting gas tax holidays.
Just seven states now have an average price below $4 per gallon.
Allowing More Ethanol this Summer
The White House today announced that it will temporarily ease pollution controls. New federal rules will allow retailers to sell gasoline with up to 15% ethanol content during summer months in an attempt to bring prices down. Federal Clean Air Act restrictions usually restrict gasoline to 10% or lower ethanol content during summer months because of pollution concerns.
The move comes less than two weeks after the White House began releasing 1 million gallons per day from the federal government’s stockpile to lower the price at the pump.
Feds Have Limited Tool Set
It typically takes about two weeks for a change to oil supply to affect gasoline prices, so any effect of the additional supply may not have shown up in pump prices yet.
The move will stretch existing gasoline supplies slightly. But it’s worth noting that Americans use between 15 and 20 million barrels of oil most days. More than half is burned as gasoline. Stretching the supply by 1 million barrels per day with a release from storage and adding 5% more ethanol content won’t have big enough effects to cut that number significantly.
The federal government has limited tools to lower gas prices. Congress could still enact a gas tax holiday like Maryland, Georgia, and Connecticut have. But experts say nothing will bring prices down like reducing demand.
