By Andrew Moran
Contributing Writer
President Donald Trump says he supports suspending the gasoline tax.
With gas prices surging 50% since the start of the war in Iran, Trump told CBS News on Monday that stopping excise taxes would be a “great idea.”
“Yup, we’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in,” the president said.
The federal excise tax on gasoline is 18.4 cents per gallon, while the tax on diesel is 24.4 cents per gallon.
As of Monday, the national average for a gallon of gas is $4.52, according to the American Automobile Association.
The Iranian conflict — now in its 11th week — has shuttered the Strait of Hormuz, a narrow waterway that handles about a fifth of the world’s oil supply.
With few shipments traversing the vital global chokepoint, international energy markets have soared, creating new price pressures for businesses and consumers.
West Texas Intermediate crude oil prices — the U.S. benchmark — have climbed more than 70% this year to around $98 a barrel, down from $119 last month.
Brent, the global benchmark for oil prices, remains above $100 a barrel in overseas trading.
Since oil accounts for half of the cost of gas, drivers have endured pain at the pump after prices had fallen below $3 earlier this year.
Trump’s comments come one day after Energy Secretary Chris Wright said the administration could consider suspending these levies.
“All measures that can be taken to lower the price at the pump and lower the prices for Americans, this administration is in support of,” Wright said in an interview with NBC’s “Meet the Press” on Sunday.
The administration has employed several measures to ease prices, including releasing oil from the Strategic Petroleum Reserves and removing sanctions on Iranian and Russian crude stranded at sea. Officials also adjusted federal regulations on summertime gasoline blends to ensure refineries can produce more gasoline.
“We’ve been in contact with all American refiners, asking them to do shorter maintenance work this spring so they can keep pumping out more products,” Wright said.
Suspending the levies would require an act of Congress.
In March, Sens. Richard Blumenthal, D-Conn., and Mark Kelly, D-Ariz., introduced legislation — the Gas Prices Relief Act — to temporarily suspend the federal gas tax through Oct. 1.
“Trump’s war of choice with Iran is driving up gas prices across the country — and Americans shouldn’t have to bear the additional economic burden of Trump’s reckless decision making,” Blumenthal said in a statement.
“With the Gas Prices Relief Act, we address rising costs plaguing Americans and ensure they are not footing the bill for Trump’s war with Iran.”
The bill has not moved since its introduction.
If implemented, the suspension could eliminate about $3 billion per month in revenue, which is directed primarily toward the Highway Trust Fund to construct and repair roadways.
Speaking to reporters at the Oval Office for a maternal health care event on Monday, the president acknowledged that while it is a small amount, “it’s still money.”
Over the past month, only two states have suspended gas taxes in response to the war-driven price spike: Georgia and Indiana.
Georgia suspended its 33-cents-a-gallon tax for 60 days, while Indiana halted its 36-cents-a-gallon excise tax for 30 days.
American sentiment on the U.S. economy has fallen due to surging gasoline prices.
The University of Michigan’s May Consumer Sentiment Index declined to an all-time low, primarily because of what they pay at the pump.
“Consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” Joanne Hsu, director of consumer surveys at the University of Michigan, said in a news release.
“Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.”
Trump said he is confident energy prices will drop after the conflict is resolved.
“As soon as this is over with Iran — as soon as it’s over — you’re going to see gasoline and oil drop like a rock,” he said.
