EPA allows early switch to winter gasoline to lower prices

Investing.com -- The Trump administration announced Thursday it will permit an early transition to winter gasoline blends as part of efforts to address fuel costs and supply concerns linked to the war in Iran.

The Environmental Protection Agency said it will relax normal summertime gasoline requirements, moving up the typical mid-September switch to September 1. The change allows the sale of gasoline blended with 10% ethanol and enables the use of a fuel blend that burns less cleanly than summer formulations.

The administration stated the move would increase domestic gasoline supply by hundreds of thousands of barrels per day by ending the summer-blend gasoline requirement early.

"President Trump has prioritized ensuring American families have affordable gasoline and energy," EPA Administrator Lee Zeldin said in a news release.

The effect on fuel prices may vary based on how quickly states respond to the federal policy change, as some states maintain their own gasoline requirements.

US average gasoline prices have exceeded $4 per gallon since mid-July, according to the American Automobile Association. Prices are about $1 higher per gallon than when the Iran war started and represent the highest price US drivers have paid this late in the year.

The Energy Department forecasts prices will remain elevated through the end of the year and recently raised its monthly outlook as the US and Iran have not reached an agreement to end the conflict and reopen the Strait of Hormuz.

The waiver permits fuel refiners and distributors to switch gasoline pumps in areas where smog is a concern. Low-volatility gasoline is mandated to reduce air pollution during summer months in many parts of the country but requires more expensive blending ingredients.

The administration has taken additional steps to lower fuel prices, including allowing foreign ships to transport oil between US ports and authorizing expanded sales of higher-ethanol E15 gasoline during summer.

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