Energy Secretary says government is ready to suspend petrol tax
Energy Secretary Chris Wright said in an interview with Meet the Press that the Trump administration is open to suspending the federal gas tax.
With gas prices hovering above $4, the White House is considering suspending the federal gas tax. But analysts say such measures would provide little relief to consumers and erode key revenue sources for transportation infrastructure and the federal budget.
The federal gasoline tax is 18.4 cents per gallon for gasoline and gasohol (fuels made from unleaded gasoline and ethanol) and 24.3 cents per gallon for diesel. The tax funds federal transportation spending through the Highway Trust Fund. These are separate from taxes levied at the state level, some of which have already been suspended.
The White House has floated the idea of using an executive order to suspend federal taxes, but only Congress can change how the Highway Trust Fund raises revenue. As prices soared this spring, lawmakers are introducing bills such as the Gas Price Relief Act of 2026.
But a mid-April analysis by the Bipartisan Policy Center found that suspending the federal gas tax for five months, as the bill suggests, would result in $17 billion in lost revenue.
To close this hole, the proposed bill would transfer funding from the federal General Fund to the Highway Trust Fund. BPC estimated that the five-month suspension would add $12 billion to the federal deficit because consumers could spend a little more on their paychecks.
“This is a major source of funding to build new roads, maintain existing roads and support our nation’s transportation infrastructure,” said Adam Hoffer, director of excise policy at the nonprofit Tax Foundation.
Meanwhile, Hoffer added, “Americans are driving more than ever before. We want our roads to be pothole-free and safe to drive on. And we need money to build these roads and build more roads in the future.”
“The traditional justification for a gas tax is that when you fill up your tank of gas, you’re paying for it to be on the road,” said Kyle Pomerleau, a senior fellow at the right-wing American Enterprise Institute.
Pomerleau told USA TODAY that tying consumer road use to use taxes is “fair and efficient.” He and many other analysts point out that current taxes haven’t been raised in decades, so stopping them now would only exacerbate the continuing deficit problem.
Will a gas tax exemption help consumers?
On the other hand, any tax holiday measures likely to have little effect on consumers. The price of 18.4 cents per gallon is lower than the current national average cost of $4.52 per gallon.
“It’s another negative for consumers in terms of cumulative inflation that they’ve had to deal with before,” said Kenneth Kim., Senior Economist at KPMG LLP.
“Last year there were tariffs, and this year energy costs have increased,” Kim added. “Consumers are under pressure, and low-income consumers are hurting in this environment.”
And some analysts think there will be new pain in pumps going forward.
“If oil prices continue to rise, price volatility could return in the coming days in many states, pushing the national average toward the $4.65 per gallon level,” Patrick de Haan, GasBuddy’s head of petroleum analysis, said in a May 11 note.
“Furthermore, diesel prices are nearing record highs in many parts of the Great Lakes region as ongoing refinery issues continue to have a disproportionate impact on diesel production. If geopolitical tensions escalate further, fuel prices could rise even more sharply in the coming weeks.”
Rob Summell, senior portfolio manager at $9 billion Tortoise Capital, said in an email statement that there may be a more common-sense approach to making pumping less painful.
“A more effective way to improve affordability would be a diplomatic solution to the Iran war that includes reopening and stabilizing access through the Strait of Hormuz,” Tummel wrote. “If global oil markets regain confidence in the free movement of oil and refined products, oil prices could fall and U.S. gasoline and diesel prices could significantly exceed the federal gasoline tax of 18.4 cents.”
This story is developing.
