In a moment that surprised approximately no one, President Donald Trump recently complained that oil companies are making too much money, and they ought to give some of it back. Left unsaid, of course, is that oil companies are making money because of increased prices for the product they sell. Those increased prices are a direct result of a conflict that the companies did not start and almost certainly would rather not have.

This follows on the president’s order to the Justice Department in June to investigate big oil companies for not bringing gasoline prices down fast enough, as crude oil prices temporarily dropped. For context, the average U.S. retail gasoline price is now north of $4 per gallon, up from less than $3 per gallon before the United States launched attacks against Iran in February.

The American Petroleum Institute gave it the old college try, noting that prices are the result of global supply and demand, and continued uncertainty around the Strait of Hormuz. In other words, the fault, dear Brutus, is not in our stars, but in ourselves.

The good news is that if the current administration is concerned about gasoline prices, there is a simple, immediate solution: Suspend the ethanol mandate (also known as the Renewable Fuel Standard). That mandate requires refineries to blend an amount of ethanol and other bio-based fuels into the gasoline supply equal to about 10% of the total fuel consumed each year.

It will probably not surprise you to discover that this government mandate, like all government attempts to “manage” the marketplace, increases costs and reduces performance. According to some, the ethanol mandate costs drivers and their families about 45 cents per gallon, or, if you like big numbers, the total annual economic cost is projected at about $88 billion.

Washington Times