(Bloomberg) -- President Joe Biden blamed a four-decade inflation high-water mark on Russian President Vladimir Putin’s invasion of Ukraine as he touted his administration’s as-yet unsuccessful efforts to lower gasoline prices.
“We saw in today’s inflation data: 70% of the increase in prices in March came from Putin’s price hike in gasoline,” Biden said at a Poet LLC ethanol mill in Menlo, Iowa. “We need to address this challenge with the urgency that it demands.”
Biden said that families’ ability to fill their gas tanks should not “hinge on whether a dictator declares war and commits genocide half a world away.” Biden has previously said Russia is carrying out war crimes in Ukraine, but has stopped short of accusing Putin of genocide.
Biden said his administration would allow expanded sales of higher-ethanol gasoline this summer in an effort to lower fuel prices.
Administration officials said the decision -- announced in Iowa, a top corn-producing U.S. state that that holds the first-in-the-nation presidential nominating contest -- could reduce the price of gasoline by as much as 10 cents per gallon.
‘Make a Difference’
“We’re leaning on you, our farmers, our biofuel refiners,” Biden said, adding that Tuesday’s announcement is “not going to solve all our problems” but would “help some people.”
Earlier: Biden Allows Sale of Higher-Ethanol Gas in Bid to Tame Costs
“I’m committed to do whatever I can to help, even if it’s an extra buck or two in the pockets that they fill up, and it will make a difference in people’s lives,” he said.
The ethanol announcement is Biden’s latest attempt to tamp down inflation, which imperils Democrats’ chances of keeping their control of Congress in the November midterm election.
The efforts appear to have had a limited impact, as inflation has continued to rise in the past several months, even after Biden and top aides assured Americans it would taper off as the country recovered from the coronavirus pandemic.
A new government report Tuesday showed that consumer prices rose by 8.5% in March from a year earlier, the most since late 1981, a figure that underscored both the painfully high cost of living for millions of Americans and the political challenge Biden faces in the fall elections.
Read More: U.S. Inflation Quickens to 8.5%, Ratcheting Up Pressure on Fed
Republicans, and some moderate Democrats, have blamed Biden’s policies, including last year’s $1.9 trillion relief package and efforts to promote clean energy for rising consumer prices.
White House officials have said prices have risen due to supply-chain bottlenecks and Russia’s invasion of Ukraine. Gasoline costs, which skyrocketed following the war, accounted for roughly half of the monthly increase, but prices for food, housing and furnishings also went up.
West Texas Intermediate jumped 6.7% to settle above $100 a barrel Tuesday, illustrating the depth of the challenge Biden faces as Putin presses forward with his invasion.
“Instead of acting boldly, our elected leaders and the Federal Reserve continue to respond with half-measures and rhetorical failures searching for where to lay the blame,” West Virginia Senator Joe Manchin, a moderate Democrat whose opposition sank Biden’s ambitious social spending plan, said Tuesday.
Read more: Manchin Blames White House, Fed for Slow Response to Inflation
While Biden’s announcement on Tuesday could have a slight effect on gas prices, it’s not expected to lower them to pre-war levels.
The Environmental Protection Agency will issue an emergency waiver to allow widespread sale of gasoline blended with 15% ethanol, which is typically made from corn. Sale of E15 gasoline is banned between June 1 and Sept. 15 in areas where smog is a problem.
The move is expected only to affect around 2,300 gas stations, a fraction of the roughly 150,000 filling stations in the U.S.
“The measure will result in only a tiny incremental amount of ethanol sold in an equally minuscule number of service stations that sell E15,” James Lucier, managing director of Capital Alpha Partners, said in a research note. “As a practical matter, there will be no visible effect on retail gasoline prices anywhere.”
©2022 Bloomberg L.P.
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