President Trump seeks rare suspension of the federal gas tax

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(The Center Square) - President Donald Trump said Monday he will move to suspend the federal gasoline tax as the national average price of a gallon remains above $4.50 amid ongoing conflict between the United States and Iran and stalled diplomatic efforts to de-escalate tensions.

Suspending the 18.4-cent-per-gallon federal gas tax, which has been unchanged for more than three decades, requires approval from Congress. Rep. Anna Paulina Luna, R-Fla., and Sen. Josh Hawley, R-Mo., said Monday they plan to introduce legislation to authorize a temporary suspension.

Hawley’s Gas Tax Suspension Act, introduced Monday afternoon, proposes a 90-day pause on both the 18.4-cent gasoline tax and the 24.4-cent diesel tax. The bill would also grant the president authority to extend the suspension for another 90 days if relief is still needed.

When the president was asked Monday afternoon how long the suspension would last, he provided no specifics, responding that the tax would not be reinstated “until it's appropriate." Trump predicted that when the conflict ends, prices will "drop like a rock." The president also dismissed the idea of a bailout for airlines struggling with jet fuel costs, stating they are "doing not badly."

On average, U.S. drivers also pay 33 cents per gallon in state gas taxes ranging from a high of about 71 cents in California to a low of approximately 9 cents in Alaska.

During an appearance on NBC's "Meet the Press" on Sunday, U.S. Energy Secretary Chris Wright said he and the president are "open to all ideas" to lower energy prices, which have surged by more than $1.50 per gallon or by about 50% since the war started on Feb. 28.

The national average price on Monday reached a new four-year high at $4.52 cents a gallon while diesel fuel hit $5.64 per gallon, up about 48% since the conflict began.

"I’m avoiding price predictions," Wright said. "Gasoline and diesel prices are up, and they’ll remain up while this conflict is in place, and then they will come back down, and ultimately they’ll come back down lower than they were before."

Rising energy prices pushed inflation to 3.3% in March, the highest of any month during the president’s current or previous term. The U.S. Bureau of Labor Statistics is scheduled to release the April Consumer Price Index report Tuesday morning, with most analysts projecting an even higher monthly inflation rate as the impact of the Strait of Hormuz blockade further hits the U.S. consumer.

Wright framed the potential suspension of the gasoline tax as part of a broader effort to provide relief to American motorists. He noted that the administration is already coordinating releases of 172 million barrels from the Strategic Petroleum Reserve along with international partners and has adjusted EPA regulations on summer fuel blends to streamline production and boost domestic gasoline supplies.

The federal gas tax, fixed at 18.4 cents per gallon for over three decades, has never been successfully suspended. While multiple presidents and lawmakers have proposed 'gas tax holidays' during energy crises, none have cleared the congressional vote required to alter the statute.

In March, Senators Mark Kelly, D-AZ, and Richard Blumenthal, D-CT, introduced legislation suspending the federal gas tax through Oct. 1, but the bill stalled before President Trump and Republican lawmakers Hawley and Luna revived the idea this week.

In the opening months of the Russia-Ukraine War in 2022, a push by President Joe Biden to suspend federal gasoline and diesel taxes for 90 days ultimately failed due to opposition by legislators concerned about the National Highway Trust Fund, which supports 90% of federal highway spending.

The legislation proposed by Hawley on Monday does not yet include a defined offset for the resulting loss of revenue to the Highway Trust Fund.

Some states, including Georgia, Indiana and Utah, have temporarily suspended their state gas taxes.