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U.S. lawmakers are considering a bill to suspend the federal gasoline tax of 18.4 cents per gallon, which is currently included in the price of gasoline. Republican Senator Josh Hawley of Missouri said on Monday that he would introduce the measure, and President Donald Trump expressed support as fuel prices have surged amid the Middle East conflict.
For the tax suspension to take effect, it would need approval by the U.S. Congress and would require backing from some Democratic senators to become law. The proposal follows a pattern in which the federal gasoline tax has historically been suspended during energy shocks, most recently in 2022 after Russia’s invasion of Ukraine pushed U.S. gasoline prices to record highs. Then-President Joe Biden supported the idea, but it did not pass Congress.
Some states have suspended the tax at the state level, but the federal tax has never been suspended nationwide.
The move comes as Americans face rising fuel costs linked to the conflict in the Middle East. Shipping through the Hormuz Strait—a chokepoint accounting for about one-fifth of global oil consumption—has been severely disrupted for more than two months, pushing crude prices above $100 per barrel.
Since the conflict began in late February, average U.S. gasoline prices have risen more than 50%, to about $4.52 per gallon. Diesel prices have climbed to around $5.64 per gallon.
To ease price pressures, Trump has released record volumes of oil from the Strategic Petroleum Reserve and relaxed certain shipping and environmental rules affecting fuels. The Energy Secretary said the administration supports any measure that could reduce retail gasoline prices and lower costs for Americans.
Analysts from the Committee for a Responsible Federal Budget (CRFB) estimate the federal gasoline tax yields about $30 billion annually for the U.S. budget. Suspending the tax for three months could reduce revenue by roughly $7 billion. Most federal gasoline tax receipts fund the Highway Trust Fund, which pays for roads, bridges, and public transit.
Bob McNally, founder of Rapidan Energy Group, said suspending the federal gas tax would only modestly help consumers if Hormuz’s oil shipments have not resumed. “The measure can only slow the pace of gasoline price increases, and the real impact on consumers would be limited,” he said.
The proposal also comes as analysts warn that gasoline and diesel prices could hit record levels in the coming weeks. On Monday, S&P Global Energy warned of a potential market crisis, citing expectations that global demand for refined products such as gasoline and diesel will fall sharply from the 2007–2009 Great Recession.
S&P Global Energy’s refinery throughput forecast indicates a significant decline in global crude processing in Q2 and Q3 year-over-year, which could keep pressure on fuel prices and reduce demand for refined products. Karim Fawaz, CEO of Fuel & Refining at S&P Global Energy, cautioned that many markets may soon have to curb fuel consumption.
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