Georgia became the first state to temporarily suspend gas taxes for drivers.
Gasoline prices soar as Strait of Hormuz closes due to Iran war
Gas prices are rising as Iran closes the Strait of Hormuz, threatening oil supplies and raising concerns about the impact on the global economy.
Georgia has become the first state to suspend gasoline taxes for drivers who refuel at the pump, as fuel prices soar due to the U.S. and Israel’s war against Iran.
But I don’t think many other states, led by Republicans or Democrats, will soon follow suit.
At least three other states have pending legislation to reduce or suspend gas taxes, but two states are not moving anywhere.
Pump prices have increased by more than $1 from a month ago, according to AAA. The national average on March 23 was $3.95 per gallon.
Drivers across the United States are calling for an end to President Donald Trump’s Feb. 28 order to attack Iran. Iran responded by closing the Strait of Hormuz, preventing about one-fifth of the world’s oil from moving to global markets.
As Americans worry about soaring prices, at least one state is trying to provide some temporary relief. On March 20, Republican Gov. Brian Kemp suspended the state’s motor fuel tax for 60 days. The excise tax on gasoline is currently 33.3 cents per gallon, and a few cents more on diesel.
“Hardworking Georgians know best how to spend their money, not their government,” Kemp said in a statement.
In Utah, a bill is on Republican Gov. Spencer Cox’s desk that would temporarily lower taxes by 15% to nearly 32 cents from July through December, said Lexi Elio, a researcher with the bipartisan National Conference of State Legislatures.
In Florida, Gov. Ron DeSantis, also a Republican, warned of suspending the state’s gas tax.
“Our ability to influence fuel prices is really minimal at best,” he told reporters on March 19. “We have had petrol holidays in the past. Sometimes prices are just increased so that consumers don’t notice the difference,” he said.
He said Floridians don’t feel relieved from past gas holidays because of fluctuating oil prices. Rather, he said the ultimate solution is to ensure good international markets, which is a federal issue.
California Governor Gavin Newsom, a Democratic presidential candidate, cited Florida’s gas tax deferral as an example of how shutdowns benefit businesses rather than drivers.
“This is just lining Big Oil’s pockets. They’re paying the price,” he told reporters on March 19.
He said the state’s gas tax is 61 cents a gallon and helps pay for roads, bridges, jobs and infrastructure investments. California pays the highest amount in the nation in gasoline taxes. Two state bills have been introduced to freeze gas taxes, but questions have been raised about the revenue loss, Elio said.
“Donald Trump is the driving force behind soaring gas and oil prices, not just here in California but across the country,” Newsom said.
New York Governor Kathy Hochul (D) similarly recognizes the risks of repealing the gas tax. He told reporters on March 16 that when taxes are cut, businesses simply raise prices, so consumers only see higher prices.
“This is a problem created by the federal government,” she said, adding that the federal gas tax is nearly 20 cents a gallon.
“We need them to feel safe and help us here,” she said. “This is what they built. You have to solve it. You break it, you fix it.”
In Maryland, Gov. Wes Moore and the Democrats who control the state Legislature are reportedly rejecting a gas tax moratorium and instead blaming President Trump for rising costs. The governor’s office said the 2022 gas tax suspension cost the state $98 million.
“This war is costing more than $1 billion a day, and the prices of oil, fuel and everyday goods are soaring,” Moore’s spokesman Ammar Moussa said in a statement. “The best way to lower prices is to address the causes of the pain, not to shift the costs of Donald Trump’s wars onto Maryland families.”
