President Donald Trump announced Monday that he will move to suspend the federal gasoline tax, a response to the surging fuel prices that have accompanied his administration’s war with Iran. The average national gas price reached $4.52 per gallon Monday, according to AAA — roughly 50 percent higher than the roughly $3 average before the war began, according to the motor club. The president cannot unilaterally suspend the tax; Congress holds that authority, and lawmakers from both parties are already reacting.
The federal levy is 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel, not counting often-higher state taxes. It generates more than $23 billion a year for federal highway and public transit programs. Asked how long the tax should be suspended, Trump told reporters at the White House, “Until it’s appropriate,” adding that while the tax represents a small fraction of the retail price, “it’s still money.”
Senate Majority Leader John Thune, a South Dakota Republican, said he has not “been a fan” of a gas tax suspension. “Any time you suspend the gas tax, that leaves a big hole in the highway trust fund, which also has implications down the road,” Thune told reporters. He said he would prefer to reopen the Strait of Hormuz — where about one-fifth of the world’s traded oil normally flows — to bring down prices without legislation. Sen. Rand Paul, R-Ky., was more direct: “Instead of suspending the tax, we should suspend the war.”
Other Republicans quickly rallied around the idea. Sen. Josh Hawley of Missouri said on social media he would introduce a suspension bill. Rep. Anna Paulina Luna, R-Fla., made a similar pledge on X. Democrats have already put forward legislation. Sens. Richard Blumenthal of Connecticut and Mark Kelly of Arizona have introduced a bill that would suspend the tax through Oct. 1, and Rep. Chris Pappas of New Hampshire has sponsored a companion measure in the House. “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 said. Kelly told reporters he still prefers his own legislation but would accept “whatever we can get at this point. People need relief.”
Sen. John Cornyn, a Texas Republican facing a tough runoff later this month, said he wants to know how road and bridge funding would be replaced before lifting the tax, but he distinguished between a temporary and a permanent suspension. “A temporary suspension to get through this sort of bumpy time because of the uncertainty about energy prices, I could live with that,” Cornyn said.
Several states, including Indiana and Georgia, have already suspended their own gasoline taxes in response to the price spike. Kentucky and Utah have reduced theirs, and other states are considering similar moves.
Industry groups caution that a suspension carries drawbacks. The American Road & Transportation Builders Association, which represents the transportation construction industry, said using general funds to offset lost Highway Trust Fund revenue could increase the federal deficit and threaten long-term infrastructure investment. The group also noted research showing that many retailers do not pass on the full amount of a tax reduction to consumers, and that state and federal taxes are just one component of a complex pricing system driven largely by the global price of oil.
The White House has already released millions of barrels from the Strategic Petroleum Reserve and temporarily lifted sanctions on certain Russian and Iranian oil shipments at sea. The administration is also negotiating with countries reliant on Middle East crude to join a coalition policing the Strait of Hormuz.