As fuel prices rise in the United States and the war in Iran pushes energy costs higher, members of Congress are pressing for a temporary pause of the federal gasoline tax, arguing it would reduce transportation costs for families and businesses. At a Cabinet meeting, President Donald Trump said he has “thought about” suspending the federal gas tax, while also pointing to states as the place to consider similar actions. In the meantime, the Trump administration has released millions of barrels from the Strategic Petroleum Reserve and temporarily lifted sanctions on some Russian and Iranian oil shipments, while pursuing steps tied to Middle East oil flows.
Several lawmakers framed the push as a way to limit the household burden that comes with higher pump prices. Sen. Richard Blumenthal, a Connecticut Democrat, said the “Trump’s war of choice with Iran is driving up gas prices across the country — and Americans shouldn’t have to bear the additional economic burden of Trump’s reckless decision making.” Blumenthal co-sponsored the Gas Prices Relief Act with Sen. Mark Kelly of Arizona, and a similar measure has also been introduced in the House by Democratic Rep. Chris Pappas of New Hampshire.
The gas-tax holiday proposals would suspend the federal fuel tax through Oct. 1. Under current law, the federal gasoline tax is 18.4 cents per gallon and the diesel tax is 24.4 cents per gallon, and the changes would apply at the federal level only; states tax fuel at additional rates that can be higher.
Supporters of the federal suspension say rising fuel costs are tightening household budgets, especially for low- and middle-income Americans with less flexibility to absorb increases in transportation spending. They also argue the tax suspension could influence driving and travel choices, which could feed through to other consumer spending. Lawmakers say any change at the federal level requires action by Congress, because the president cannot suspend the tax on his own.
In Washington, Republicans control both the House and Senate, but the bills on suspending the federal tax are still viewed as unlikely to move unless Trump signals support. In the lead-up to the political debate, the administration has taken steps aimed at easing oil-market pressures tied to the region, including negotiating with countries that rely on Middle East crude to join a coalition to police the Strait of Hormuz, through which about one-fifth of the world’s traded oil normally flows.
Industry groups have urged caution about whether suspending the federal gas tax would deliver meaningful relief and how it would affect transportation funding. The American Road & Transportation Builders Association said the gasoline tax is the single largest source of revenue for federal highway and public transit programs, and argued that even if bills would offset lost Highway Trust Fund revenue with general funds, the suspension could raise the federal deficit and jeopardize the long-term sustainability of investments.
The group also said research it cited indicates that many retailers do not pass the full amount of gas-tax reduction to consumers. It added that state and federal gas taxes are only one component of a broader fuel-pricing system, which also reflects the global price of oil and other factors.
While the federal proposals move through Congress, some states have already considered or implemented their own fuel-tax breaks. Georgia Gov. Brian Kemp signed a 60-day suspension on March 20 of the state’s 33-cents-per-gallon tax on gas and 37-cents-per-gallon tax on diesel. Kemp said he wanted to “return taxpayer money where it belongs, in the pockets of hardworking Georgians,” and early results reported by AAA showed Georgia’s gas prices falling 15 cents a gallon while gas prices nationwide rose an average of 10 cents per gallon in the week that ended Thursday.
Other states have weighed similar ideas, including California, Connecticut, Florida, Maryland and Utah. Connecticut Gov. Ned Lamont suggested a temporary suspension of the state’s 25-cent-per-gallon gasoline tax and 48.9-cent diesel tax, while it remained unclear whether it would happen; state officials have also discussed possible rebate checks. Florida Gov. Ron DeSantis, who has supported past gas tax holidays, expressed skepticism about whether drivers would see real savings, saying “Our ability to influence fuel prices are really marginal,” and that prior efforts did not always translate into relief at the pump.
Beyond tax changes, drivers seeking to lower costs can also adjust their habits. Consumer Reports advised drivers to obey speed limits and drive smoothly, saying steady speeds can improve fuel economy, while speeding and abrupt driving increase consumption and create safety risks.
Associated Press writers Jeff Amy in Atlanta and Susan Haigh in Hartford, Conn., contributed to the report.