The Biden administration announced on Tuesday that it is planning to increase the production and sale of ethanol-blended gasoline to mitigate the impact of increasing fuel prices amid the surging inflation rate.
Senior White House officials informed the media that United States President Joe Biden is going to announce that the Environmental Protection Agency expects to issue an emergency waiver that would suspend a summer ban on the use of a specific blended fuel.
Biden will disclose the plan when he visits a bioprocessing plant in Menlo, Iowa, which produces a large percentage of the nation's ethanol, as reported by NBC News.
According to White House officials, the administration's plan will reduce prices at the 2,300 gas stations nationwide that offer ethanol-blended fuel by about 10 cents per gallon at current prices.
High Inflation Caused By Russia-Ukraine War
In recent weeks, average gas prices have risen to more than $4 a gallon, with the administration mostly blaming the ongoing war in Ukraine launched by Russian President Vladimir Putin.
Biden recently outlined plans to release around 1 million barrels of oil per day from the Strategic Petroleum Reserve for six months in a "wartime bridge" to prevent prices from soaring.
The White House announcement comes only hours before the Labor Department releases new inflation figures. The Consumer Price Index for March, according to White House press secretary Jen Psaki, might be "extraordinarily inflated."
The Russia-Ukraine war contributed to a record rise in gas prices and worsened existing supply chain problems, causing Americans to spend even more for basic goods in March, propelling inflation to a new four-decade high of 8.5 percent.
Based on figures issued Tuesday by the Bureau of Labor Statistics, the latest increase in March represented the highest annual rate of inflation since December 1981, as per New York Post report.
The Consumer Price Index - an inflation indicator that details the expenses of goods and services - increased by 1.2% from February to March every month.
According to the Labor Department, the main contributions to inflation were price increases for gasoline, lodging, and food. In March, the gasoline price index increased by 18.3 %.
Even when volatile food and gas prices are excluded, the CPI grew 6.5% year over year.
The study released in March was the first to comprehensively reflect the effects of Russia's invasion of Ukraine, which resulted in a slew of severe economic penalties, including a US ban on Russian energy imports.
What To Expect In The Coming Months?
The New York Fed's Survey of Consumer Expectations indicated people predict inflation to be 6.6% a year from now. That was a new record for the survey, and it was up significantly from 6% in February.
The figure comes as costs for petroleum and agricultural commodities increase prompted by the Russia-Ukraine war.
According to the survey, Americans expect their household expenditure to climb in the coming year to keep up with rising prices.
Expectations for spending increased to 7.7%, a new record for the New York Fed poll and the largest one-month increase since the series began in 2013.
Economists polled by Refinitiv predict that the Consumer Price Index for March will hit 8.4%, matching the level from January 1982 and setting a new 40-year high, according to a report from CNN.
The Ukraine crisis continues to put pressure on the prices of goods, so it's unclear whether that's the accurate inflation numbers.
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