Trump Backs Federal Gas Tax Cut as Surging Fuel Prices Fuel Political Pressure Ahead of Midterms

BY MIRABEL ODETA

U.S. President Donald Trump said Monday that he supports reducing the federal gasoline tax as Americans face sharply rising fuel costs driven by escalating tensions in the Middle East and disruptions to global oil supplies.

Speaking to reporters in the Oval Office, Trump said he intends to push for a suspension of the federal gas tax, which currently stands at 18.4 cents per gallon for gasoline. The president indicated the reduction could remain in place for as long as necessary to help consumers struggling with rising costs at the pump.

“Yeah, I’m going to reduce it,” Trump said when asked whether he planned to suspend the tax. Pressed on how long the pause could last, he responded, “Till it’s appropriate.”

Any suspension of the federal fuel tax would require approval from Congress, where Republicans currently hold narrow control of both chambers. The proposal is already gaining support from some lawmakers as fuel prices climb to levels not seen in years.

Republican Senator Josh Hawley announced plans Monday to introduce legislation that would temporarily suspend both the federal gasoline tax and the 24.4-cent diesel tax for 90 days. Supporters argue the move could provide at least modest relief to consumers and businesses facing higher transportation and energy expenses.

The push for a tax holiday comes as gasoline prices continue to surge following the outbreak of conflict involving Iran and the continued disruption of shipping through the Strait of Hormuz. The strategic waterway normally carries about 20% of the world’s oil supply, making it one of the most important energy transit routes globally.

As tensions intensified, oil prices rose sharply, driving up fuel costs across the United States. According to AAA data, the national average gasoline price reached $4.52 per gallon on Monday, the highest level since 2022, when prices briefly exceeded $5 per gallon during earlier global energy disruptions.

The increase is becoming a major political challenge for Republicans ahead of the November midterm elections. Rising gasoline prices tend to have a broad economic impact because they also increase transportation costs for food, consumer goods, and industrial supplies, contributing to inflation pressures throughout the economy.

While Trump voiced support for a tax suspension, some Republican leaders remain cautious. Senate Majority Leader John Thune declined to fully endorse the proposal, saying lawmakers still need to evaluate the idea carefully.

Thune argued that reopening the Strait of Hormuz and restoring stable global oil shipments would likely have a bigger impact on lowering prices than temporarily suspending the federal fuel tax. He also noted that gasoline and diesel taxes provide critical funding for road repairs and transportation infrastructure projects across the country.

“We’ll see where our members are,” Thune said when asked about congressional support for the measure.

Interestingly, the idea of a federal gas tax suspension has also received backing from some Democrats. Earlier this year, Democratic Senator Mark Kelly and several colleagues proposed pausing the tax through October in response to rising energy costs.

The federal gasoline tax generates roughly $2.5 billion per month, money that is primarily used to fund highway construction, bridge repairs, and transportation infrastructure improvements. Since 2008, lawmakers have repeatedly transferred money from the federal government’s general fund to support transportation programs because gas tax revenues alone have not been enough to cover spending needs.

According to government estimates, more than $275 billion has been shifted into transportation funding programs over the past several years, including substantial allocations from the 2021 infrastructure law.

Trump also addressed concerns about the airline industry, which has been hit hard by rising jet fuel costs. Several low-cost airlines have warned that soaring fuel prices are damaging profitability and increasing financial pressure across the aviation sector.

Speaking earlier Monday, Trump said proposals for a federal airline bailout had not been seriously presented to him and argued that most airlines were still performing relatively well despite the spike in fuel costs. However, some industry groups have requested government assistance, including a reported $2.5 billion support package sought by low-cost carriers.

The strain on airlines has already become visible in the market. Spirit Airlines recently halted operations after blaming surging fuel expenses for undermining its restructuring plans.

In addition to considering a federal tax cut, the Trump administration has introduced several other measures aimed at stabilizing energy prices. These include releasing crude oil from the Strategic Petroleum Reserve and temporarily easing restrictions under the Jones Act, a shipping law that regulates domestic maritime transportation. Officials hope the steps will make it easier and cheaper to move oil, fuel, and fertilizer throughout the country.

Several U.S. states have also begun taking independent action. States including Indiana, Kentucky, and Georgia have introduced temporary fuel tax reductions to help ease pressure on drivers and businesses.

Despite the growing political momentum behind a federal tax holiday, some energy experts warn the impact on consumers may be limited if tensions in the Middle East continue disrupting oil supplies.

Bob McNally, founder of Rapidan Energy Group and a former White House energy adviser under President George W. Bush, said a gas tax suspension may do little to offset rising crude prices if shipping disruptions persist in the Persian Gulf.

“If the federal gasoline tax is suspended but the Strait of Hormuz remains closed, consumers will barely notice as pump prices continue to march higher,” McNally warned.

Economists and market analysts say the direction of fuel prices in the coming weeks will largely depend on geopolitical developments in the Middle East and whether oil shipments through the Strait of Hormuz can return to normal levels. Until then, rising energy costs are expected to remain a major issue for consumers, businesses, and political leaders alike.