President Donald Trump said his administration is considering temporarily suspending the federal gasoline tax as elevated fuel prices squeeze consumers, following his decision to broaden access to tax-exempt red-dyed diesel.
By yourNEWS Media Newsroom.
President Donald Trump said Tuesday that his administration is considering suspending the federal gasoline tax as high fuel prices continue to increase costs for American motorists and create economic pressure weeks before the midterm elections.
“We’re thinking about that,” Trump told reporters when asked whether he supports suspending the federal levy, according to Reuters. Trump did not specify how long a suspension could remain in place or when the administration might seek congressional action.
The federal excise tax on gasoline is 18.4 cents per gallon, while diesel carries a federal tax of 24.4 cents per gallon. Revenue from the taxes largely supports the Highway Trust Fund, which finances federal highway and transit programs.
Trump has previously backed temporarily lifting the gasoline tax as energy costs rose following the outbreak of the U.S.-Israeli war with Iran. In May, he said the tax should be reduced “until it’s appropriate,” suggesting it could later be restored as gasoline prices declined.
A federal gasoline-tax suspension would require congressional legislation. The president cannot unilaterally eliminate the statutory tax.
Trump’s latest comments came one day after he signed an executive order expanding the use of red-dyed diesel, fuel that traditionally has been exempt from the federal highway tax because it is restricted to off-road purposes including agriculture and construction.
The order temporarily permits broader highway use of the fuel as the administration attempts to reduce diesel costs. Trump announced the action during a rally in Nebraska.
The administration has pursued several measures to increase fuel supplies after the Iran war sharply disrupted global oil and refined-product markets.
The Strait of Hormuz, one of the world’s most important energy shipping corridors, has faced severe disruptions, while attacks on oil infrastructure and refinery outages have tightened supplies of gasoline, diesel and crude.
Trump has also pressed allied countries to tap emergency reserves. Group of Seven nations recently agreed to release diesel and crude stockpiles following U.S. pressure intended to relieve shortages and curb prices.
Fuel costs have become an increasingly visible economic issue heading into the Nov. 3 congressional elections.
Republicans currently control both chambers of Congress by narrow margins, making household concerns about gasoline, diesel and other everyday expenses especially significant during the closing weeks of the campaign.
The latest Reuters/Ipsos survey, conducted Sept. 30 through Oct. 5, found Trump’s overall job approval at 32%, unchanged from September and at the lowest level measured during his political career. The survey also showed persistent dissatisfaction over the cost of living and greater support nationally for Democratic than Republican congressional candidates.
Economic pressure from fuel prices has extended beyond gasoline.
Heating-oil prices have risen sharply in the Northeast, while diesel prices have affected trucking, agriculture and other industries heavily dependent on fuel. Democratic lawmakers from northeastern states have called for additional federal action as winter approaches.
Trump has attributed much of the increase in fuel costs to wartime disruptions and global supply constraints, while his administration has sought to increase available supplies through emergency reserves, regulatory changes and expanded access to untaxed diesel.
A gasoline-tax holiday would represent a more direct attempt to reduce what drivers pay at the pump.
If the entire federal tax reduction were passed through to motorists, temporarily suspending the levy could reduce the federal component of gasoline prices by 18.4 cents per gallon. The ultimate retail savings would depend on market conditions and how refiners, wholesalers and retailers respond.
The proposal would also raise questions about lost revenue for the Highway Trust Fund unless Congress provided replacement funding from another federal source.
Trump has not yet said when he could ask lawmakers to approve a suspension or how long he would want the tax holiday to remain in effect.
For now, his comments signal that the administration is considering another step to lower visible energy costs as elevated fuel prices remain one of the most immediate ways consumers are experiencing the economic effects of the Iran war and broader disruptions to global energy markets.
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