By Nandita Bose, Timothy Gardner and David Shepardson
WASHINGTON, May 11 (Reuters) – President Donald Trump said on Monday he backs reducing the 18.4-cent federal gasoline tax as U.S. fuel prices shoot higher due to the Iran war and have sparked anger among U.S. motorists.
Waiving the tax requires Congress, which is controlled by Trump’s fellow Republicans, to pass legislation.
“Yeah, I’m going to reduce,” Trump told reporters on whether he would suspend the tax. Asked how long he would suspend the tax, Trump said in the Oval Office, “till it’s appropriate.”
Senator Josh Hawley, a Missouri Republican, said he is introducing legislation on Monday to suspend the gas tax and the 24.4-cent diesel tax for 90 days.
Gas prices have risen since the war began on February 28, and as Iran effectively keeps closed the Strait of Hormuz, a chokepoint through which 20% of the world’s oil traditionally passes. Gasoline prices in the U.S. averaged $4.52 a gallon as of Monday, the highest since 2022, when the average peaked at $5.01, according to AAA motor club.
Senate Majority Leader John Thune on Monday was noncommittal about a gas tax freeze, arguing the best way to get gas prices to fall is to reopen the Strait of Hormuz, and noted the taxes support road repairs.
“We’ll see where our members are,” Thune said.
In March, some Democrats including Senator Mark Kelly of Arizona first proposed suspending the tax, which generates about $2.5 billion per month in road funding, until October. Since 2008, more than $275 billion – including $118 billion from the 2021 infrastructure law – has been shifted from the general fund to pay for road repairs.
Trump told CBS earlier on Monday that a bailout plan for airlines, which are struggling with surging jet fuel costs, had not “really been presented” and that “the airlines are doing not badly.” Low-cost carriers have asked for a $2.5 billion bailout and Spirit Airlines ceased operations on May 2, blaming high jet fuel prices for making its restructuring plan impossible.
U.S. states also tax gasoline, with Indiana, Kentucky and Georgia moving to make cuts to give consumers some relief at the pump.
Rising fuel costs, which also stand to boost the price of groceries and other goods, are a vulnerability for Trump and Republicans who are trying to hold control of Congress in the November midterm elections. Trump said he knows the tax is only a small percentage of the overall cost of gasoline for consumers, “but it’s still money.”
CONSUMERS WILL BARELY NOTICE
Trump has taken a number of other actions meant to calm energy prices, such as loaning crude from the Strategic Petroleum Reserve and waiving a shipping law known as the Jones Act that makes it easier to move oil, fuel and fertilizer around the United States.
Bob McNally, the founder and president of Rapidan Energy Group who served as White House energy adviser to former President George W. Bush, said waiving the tax may not make much difference if the war continues to clog shipments in the Middle East.
“If the federal gasoline tax is suspended but the Strait of Hormuz remains closed, consumers will barely notice as pump prices continue to march higher,” McNally said.
(Reporting by Timothy Gardner and Nandita Bose in Washington; Additional reporting by Katharine Jackson and David Shepardson and Nolan McCaskill in Washington; Writing by Susan Heavey; Editing by Bill Berkrot, Nick Zieminski, Matthew Lewis and Stephen Coates)
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