Trump backs temporary gas tax suspension as prices surge amid Iran war

Trump endorsed a temporary federal gas-tax suspension as the war with Iran kept crude and pump prices elevated, but the relief on drivers’ receipts would be small compared with the size of the shock.

Trump told CBS News on Monday, “I think it’s a great idea,” and said he wanted to take off the gas tax “for a period of time” before letting it phase back in when prices fell. The federal gasoline tax is 18.4 cents a gallon and the diesel tax is 24.4 cents, and any suspension would need congressional approval because the levy is set by law.

The timing reflected how quickly the conflict has filtered through to U.S. households. CBS reported that regular gas had risen about $1.54 a gallon since the United States and Israel attacked Iran in late February. By May 11, AAA put the national average for regular gasoline at $4.520 a gallon, the highest national average since 2022 and about $1.54 above the year-ago level of $3.135.

Even so, the arithmetic suggests a gas-tax holiday would provide only modest relief. CBS reported that suspending the federal fuel tax would reduce regular gas from about $4.52 to about $4.34 a gallon and diesel from about $5.63 to about $5.39. Patrick De Haan of GasBuddy said the 18-cent tax “does not amount to much” when prices are already about $1.50 a gallon higher than a year ago. Andrew Lautz of the Bipartisan Policy Center said a federal gas-tax holiday could save drivers only about $2 per fill-up at national average prices.

The proposal also would reopen a familiar budget fight. GasBuddy estimated the move would cost the federal government about $2.1 billion a month in lost revenue, money that would otherwise flow to the Highway Trust Fund. That fund has long relied on motor-fuel taxes, and the Congressional Budget Office says its balances are projected to be exhausted in 2028, underscoring how little room remains in the system that pays for roads and transit.

Sen. Josh Hawley, a Missouri Republican, said Monday that he planned to introduce legislation to suspend the gas tax for 90 days after enactment, with an option for the president to extend the pause another 90 days if economic conditions warrant. Hawley said the bill would give American workers and families immediate relief.

The idea has been tested before. In June 2022, President Biden asked Congress to suspend the federal gas tax for three months during the Ukraine war and near-$5 gas, while also calling for the Highway Trust Fund to be made whole. Some states, including Georgia, Indiana and Utah, have also waived their own fuel taxes in recent years, but those moves did little to change the larger force at work: global conflict pushing up crude, and crude pushing up what drivers pay at the pump.