By Jarrett Renshaw
HOUSTON, March 25 (Reuters) - President Donald Trump's administration announced on Wednesday it will temporarily suspend federal anti-smog regulations on seasonal gasoline blends to combat higher pump prices since the start of the war on Iran.
The move by the Environmental Protection Agency will allow retailers to sell less expensive formulations of gasoline, including mixtures that include 15% ethanol – known as E15 – that are typically not permitted during warmer months.
The waiver takes effect for 20 days starting May 1, and can be extended if needed, the agency said.
"We foresee potential for a disruption to the American fuel supply," EPA Administrator Lee Zeldin said at a press conference on the sidelines of the CERAWeek energy conference in Houston, at which he announced the waiver.
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An EPA press release said the move allows nationwide sales of E15 and will also "remove all federal impediments to selling E10, gasoline blended with 10 percent ethanol, across the country." E10 is already widely available year-round.
Analysts said the change could shave several cents per gallon off retail prices. The U.S. average price for a gallon of regular gasoline is running just over $3.98, up more than a dollar from a month ago, according to data from AAA.
Global oil prices have surged since the start of the U.S. and Israeli war against Iran as the conflict blocks shipments through the Strait of Hormuz, the conduit for a fifth of world crude and liquefied natural gas supply.
The White House is trying to contain the economic and political fallout from the war. It has already announced a release of crude oil from U.S. emergency stockpiles and the easing of sanctions on both Russia and Iran to make more of their oil available to the market.
(Writing by Richard Valdmanis; Editing by Costas Pitas, Chizu Nomiyama and Nia Williams)