Trump Moves to Cut Gas Tax as Fuel Prices Surge

As fuel prices climb and the ceasefire with Iran looks increasingly unstable, Donald Trump is turning to one of the few politically visible tools available: the federal gasoline tax.

Trump said on Monday that he plans to suspend the 18.4-cent-per-gallon federal tax on petrol, presenting the move as a way to offset the sharp rise in prices since the war with Iran began.

“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,” Trump told CBS News.

Later, he told reporters the tax would be waived “till it’s appropriate”.

The proposal is aimed squarely at consumer frustration, but there is an important limitation: the White House cannot suspend the tax on its own. Because the levy is set by federal law and helps generate about $2.5bn for road infrastructure, any pause would require approval from Congress.

That legislative hurdle may not be insurmountable. Senator Josh Hawley, a close Trump ally, said he would introduce legislation to implement the measure. The idea has also attracted bipartisan interest. In March, Senator Mark Kelly proposed suspending the tax through October.

The policy discussion reflects a larger economic concern. Since the US-Israel war on Iran began on February 28, fuel costs have risen steadily. According to the American Automobile Association, the average price of regular gasoline has climbed to $4.52 per gallon, up from $2.98 when the conflict started.

The situation worsened after Trump said the ceasefire with Iran was on “life support”, a remark that dampened hopes for a quick diplomatic resolution and pushed oil prices higher.

Brent Crude rose more than 3 percent to $104.46 a barrel, after touching an intraday high of $105.99. West Texas Intermediate climbed above $98 and briefly crossed the $100 mark.

The market reaction has been uneven. While households are facing higher fuel and transport costs, shares of major oil companies moved higher. ExxonMobil, Chevron, Shell and BP all gained in trading.

Analysts say the tax cut would provide some relief, though its impact would vary by region. Rachel Ziemba of the Center for a New American Security said: “I anticipate it would pass, but there could be a procedural delay. It also suggests that President Trump doesn’t see a quick end to the reduced volumes and is trying to cushion the American consumer.”

“The impact could be greater in states that have also reduced their own petrol taxes and could reinforce differentiation between petrol prices by region.”

Several states, including Indiana, Kentucky and Georgia, have already reduced their own fuel taxes.