U.S. President Donald Trump said on May 11 he backs suspending the federal gasoline tax for a period of time as fuel prices rise amid the U.S.-Iran war and disruption in the Strait of Hormuz. He said the break should last “until it’s appropriate,” but any pause would need approval from Congress. [1, 2, 3, 4, 5, 6, 7, 8, 9]
Trump told reporters at the White House, “Yup, we’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in.” He also said, “We’ll see where the members are,” signaling the plan still faces a legislative test. [3, 8]
Republican Senator Josh Hawley said he will introduce a bill to suspend the federal gasoline and diesel taxes for 90 days. The federal gasoline tax stands at 18.4 cents a gallon, while the diesel tax is 24.4 cents a gallon. [1, 2, 4, 5, 6, 7, 8, 9]
The push comes as the nationwide average price of regular gasoline has climbed to $4.52 a gallon, with reports tying the jump to the war and higher risks to shipping through the Strait of Hormuz. Some reports said the tax holiday would offer only limited relief because the savings are a small slice of the recent price surge, even as Trump said the tax is still money consumers are paying. [2, 3, 4, 10, 11, 5, 6, 7, 8, 9]
The proposal would also cut federal highway revenue and put pressure on the Highway Trust Fund, according to reports. U.S. officials have already used or plan to use the Strategic Petroleum Reserve and other steps to try to cool prices. [3, 5, 6, 8, 9]
CNA reported on May 13 that the U.S. Energy Information Administration raised its forecast for U.S. vehicle fuel prices under a scenario in which the Strait of Hormuz stays shut. [11]
