The result was a compromise under which gasoline sold in 1995 will be 15 percent cleaner than it is now.
But for the last week, gasoline has been selling at the pump for a much more congenial $2 a gallon.
Administration officials announced the proposal at a Los Angeles gas station, where regular gasoline was selling for $2.80 a gallon.
Elsewhere, officials said that after the price spikes on Tuesday and Wednesday, gasoline was selling at or below Monday prices.
Before the recent decline in the price of crude, he said, gasoline had been selling for $6 or $7 more than crude.
The cost of alcohol in Brazil is higher than most gasoline sold in Europe in 1980.
Regular gasoline is now selling for just more than $2.05 a gallon on average, according to the AAA.
Premium-grade gasoline sells for as much as 20 cents a gallon more than regular.
The new increases mean that gasoline will sell for about $2.40 a gallon.
In another example of costly subsidies, gasoline sells for less than 10 cents a gallon.