WASHINGTON—The Biden administration said Tuesday it would allow high-ethanol content gasoline to be sold in the hot summer months, in an effort aimed at lowering prices at the pump that could pay political dividends in farm-country states.

“It reduces our reliance on foreign oil. Adding this fuel to our gasoline, 10% or 15% or even more, stretches the supply,” President Biden said at a Poet LLC ethanol-processing facility in Menlo, Iowa. “It gives you a choice at the pump. When you have a choice, you have competition. When you have competition, you have better prices.’’