President Donald Trump said on Monday (May 11) that he plans to suspend the federal gasoline tax as Americans struggle with soaring fuel prices following the war with Iran.
Speaking to reporters at the White House, Trump said the suspension would remain in place as long as necessary.
Asked how long the suspension would last, Trump said: “As long as it’s appropriate.”
Trump says even a small tax break ‘is still money’
Trump acknowledged that the federal gasoline tax represents only a small portion of the total cost of fuel, but argued that any reduction would still help consumers.
“It’s a small percentage, but you know it’s still money,” he said during remarks in the Oval Office.
The federal tax is currently 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel, according to the U.S. Energy Information Administration.
The tax is separate from state fuel taxes, which can significantly increase pump prices.
Gas prices skyrocketed after the Iran war
Fuel prices in the United States have risen sharply since the conflict between the US, Israel and Iran began on February 28.
According to AAA, the national average price of gasoline hit $4.52 a gallon on Monday — about 50% higher than the average price before the conflict broke out.
The current national average is the highest since 2022, when gas prices peaked at $5.01 a gallon.
Rising fuel prices also raised concerns about broader inflation, including higher prices for food, transport and consumer goods.
Congress must approve the gas tax exemption
Although Trump supports suspending the federal gas tax, the move would require congressional approval.
Lawmakers from both parties supported proposals to temporarily suspend the tax to provide relief to households and businesses struggling with transportation costs.
The federal fuel tax generates more than $23 billion annually to fund highway construction and public transportation programs across the United States.
Several states, including Indiana and Georgia, have already temporarily suspended their state gasoline taxes due to rising energy prices.
Other states are said to be considering similar measures.
The Trump administration is taking further steps
As fuel prices continue to rise, the Trump administration has taken several emergency measures aimed at stabilizing oil markets.
The administration released millions of barrels of oil from the US Strategic Petroleum Reserve and temporarily eased sanctions on some Russian and Iranian oil shipments already at sea.
Washington is also reportedly in talks with Middle Eastern oil-dependent countries to form a coalition to secure shipping lanes through the Strait of Hormuz.
Roughly one-fifth of the oil traded globally routinely passes through the strait, making the region a focal point for global energy markets.
Republicans worry about the midterm impact
The rise in fuel prices has raised political concerns among Republicans ahead of the November election.
Higher gasoline prices are seen as a potential vulnerability for Trump and his allies as voters face rising costs of living.
Trump has previously argued that higher energy prices were justified to prevent Iran from acquiring nuclear weapons.
However, the administration’s stance appeared to soften over the weekend when Chris Wright indicated an openness to tax relief measures.
“We’re open to all ideas,” Wright said during an interview with NBC News, including temporarily suspending the federal gasoline tax.
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