Trump wants to lift the federal tax on gas. But don’t expect much relief even if it happens

 

President Donald Trump said Monday that he intends to suspend the federal gas tax amid soaring prices at the pump as the US war with Iran drags on.

The spike is deepening consumers’ pessimism about the economy, adding to Republicans’ concerns about their fate in November’s midterm elections.

However, pausing the 18.4-cent-per-gallon levy on gas and the 24.4-cent-per-gallon tax on diesel won’t do much to relieve drivers’ pain, multiple experts told CNN. Suspending the tax could wind up pushing up prices more and would hurt the Highway Trust Fund, which depends on the revenue from the levy.

Also, Trump would need congressional approval to suspend the federal gas tax — which lawmakers have never done, despite calls now and in the past when fuel prices have risen sharply. In 2022, a Democratic-controlled Congress rebuffed former President Joe Biden’s request to suspend the levy. More recently, several lawmakers have introduced bills to pause the tax.

Gas prices have skyrocketed to a nationwide average of $4.52 per gallon on Monday, up from $2.98 per gallon before the conflict began on February 28. The main issue is that oil tankers still can’t pass safely through the Strait of Hormuz despite a ceasefire, which Trump said Monday was “on massive life support.”

Tracking US gas prices

The national average gas price is $4.52 per gallon, unchanged from yesterday and up $1.38 from this time a year ago.

There are several reasons why drivers wouldn’t see a lot of relief at the pump. Among them is that retailers and other players in the supply chain typically don’t pass along all of those savings to consumers, according to the Penn Wharton Budget Model, which previously examined the impact of states’ gas tax holidays in 2022.

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