US considers adding more ethanol to petrol to lower pump price: sources

[NEW YORK] The Biden administration is considering temporarily removing restrictions on summer sales of higher-ethanol petrol blends as a way to lower fuel costs for US consumers, 3 sources familiar with the matter told Reuters.

The review comes as President Joe Biden seeks to tame soaring pump prices, which hit a record this month following Russia's invasion of Ukraine in late February.

The United States and other consumer countries have banned imports of oil from major world supplier Russia to punish it for the invasion.

Adding more ethanol to petrol blends could potentially reduce prices at the nation's gas pumps because ethanol is currently cheaper than straight petrol.

The Environmental Protection Agency said it could not comment on whether it was considering the move, but said it was "considering a range of options across the administration to help mitigate impacts from Russia's actions on American consumers". The action would be welcomed by the ethanol industry, which has fought to increase sales of the fuel blend, known as E15, and lift summertime restrictions on it. E15 contains up to 15 per cent ethanol, versus the 10 per cent found in most US petrol.

The summertime ban on E15 was imposed over concerns that it contributes to smog in hot weather.

A bipartisan group of US Farm Belt lawmakers has been pushing the White House to lift the summertime E15 ban.

Earlier this month, senators including Chuck Grassley from Iowa and Dick Durbin from Illinois asked Biden in a letter that he allow the sale of E15 over the 2022 driving season, arguing the added ethanol would bring lower costs to consumers.

The move, however, has the potential to lift prices for food since ethanol is made from corn. The Biden administration was previously studying whether waiving mandates that require biofuels be blended into the nation's fuel mix could help offset a surge in prices for food ingredients like corn and soy oil.

Inflation is seen as a major threat to Democrats at the polls in November's mid-term elections. REUTERS