With gas pricing climbing amid escalating tensions in the Middle East and growing concerns over global oil supplies, President Trump is backing a proposal he says could offer Americans relief at the pump: temporarily suspending the federal gas tax.
The White House argues the move could help lower fuel costs at a time when many Americans are already feeling squeezed by inflation and higher everyday expenses. But economists and budget experts warn the actual savings for drivers may be relatively modest, while the broader tradeoffs for infrastructure funding and the federal budget could be far more significant.
Here’s what to know about Trump’s proposal, how the federal gas tax works, and why some analysts remain skeptical it would meaningfully lower prices for consumers.
What Trump is proposing
In an interview with CBS News on Monday, Trump said he supports suspending the federal gas tax “for a period of time” before reinstating it “when gas goes down,” or when he thinks “it’s appropriate.”
Suspending the federal gas tax would require an act of Congress, and lawmakers on both sides of the aisle have already floated similar proposals. Backed by Trump’s support for the idea, GOP Sen. Josh Hawley announced Monday that he plans to introduce legislation that would temporarily suspend the tax.
Democrats introduced legislation in March that would suspend the federal gas tax through October, though the proposal has since stalled in Congress. That bill was spearheaded by New Hampshire Rep. Chris Pappas and Arizona Sen. Mark Kelly. After Trump voiced support for suspending the gas tax, Pappas responded in a post on X, saying, “This should have happened months ago,” before adding: “Let’s pass it this week.”
What is the federal gas tax — and where does the money go?
The federal gas tax is what drivers pay on every gallon of gasoline purchased in the U.S. Right now, the federal government charges 18.4 cents per gallon of gas and 24.4 cents per gallon of diesel — rates that have remained unchanged since 1993.
That money flows into the Highway Trust Fund, which helps pay for roads, bridges, highway repairs, and public transportation projects across the country. It’s a major source of federal infrastructure funding, supporting everything from interstate maintenance to local transit upgrades. This is separate from taxes levied at the state level, some of which have already been suspended.
Would a gas tax holiday actually lower prices for consumers?
The short answer: probably not by much. Those 18.4 cents per gallon added by the federal gas tax is only a small share of the national average gas price of $4.52, according to AAA. Even if the tax were temporarily suspended, analysts estimate it would lower prices by only about 4 percent, saving drivers roughly $2.21 on a typical 12-gallon fill-up.
And consumers likely would not see the full 18-cent savings reflected at the pump. The Bipartisan Policy Center estimated gas prices would likely fall by about 10 to 16 cents per gallon instead, with gasoline suppliers keeping the remaining benefit.
Why some experts are skeptical
Analysts say a federal gas tax holiday would likely offer only modest relief for consumers.
According to the Committee for a Responsible Federal Budget, the direct savings would reduce overall household spending by only about 0.2 percent. The group also warned that fuel companies could respond by raising pre-tax gas prices, while the broader economic effects of a gas tax holiday could put upward pressure on inflation and interest rates, eating into some of the savings drivers might otherwise see.
"It’s just another negative for the consumer in terms of the cumulative inflation they’ve had to deal with," economist Kenneth Kim told USA Today, pointing to higher energy costs and last year's tariffs.
Critics also warn the proposal could further erode a major source of funding for transportation infrastructure and the federal budget. Since neither the federal government nor many states adjust gas taxes for inflation, the revenue they generate has steadily lost value over time. In real terms, the federal gas tax has lost nearly half its purchasing power since it was last updated more than 30 years ago, according to the nonpartisan Tax Foundation. That means less money for highway repairs, bridge maintenance, and transit upgrades, even as infrastructure needs continue to grow.
Why now?
The push for a federal gas tax suspension underscores the growing political pressure surrounding high fuel prices. Eight in 10 Americans say gas prices are straining their budgets, including overwhelming majorities of Democrats, independents, and Republicans alike, according to the latest NPR/PBS News/Marist poll.
The poll also found that 63 percent of Americans say they blame Trump “a great deal” or “a good amount” for higher gas prices. That includes more than 6 in 10 independents and nearly one-third of Republicans.
