Biden To Ask Congress To Suspend Federal Gas Tax For Three Months

President Joe Biden, requested to suspend the federal gas tax until September as Americans across the country struggle for rapid high inflation in gas prices as the pump.

In regards to this, the president will instigate members of Congress to embark on a three-month federal gas tax vacation without depriving Highway Trust Fund, the money that finances highways and mass transit.

The national average for a gallon of gas currently sits at near $5. Before this year, the highest national gas price average ever recorded by AAA was $4.114 per gallon in July 2008.

The president accused oil refiners of driving up gas prices in letters sent last week to seven refinery operators, including Chevron, ExxonMobil and BP. But oil refiners have said their ability to produce additional gas and diesel fuel is limited.

The American Petroleum Institute and American Fuel & Petrochemical Manufacturers sent a joint letter to Biden last week saying that refineries are already operating close to their maximum capacity and nearly half of the capacity taken off-line was because of the facilities converting to renewable energy production.

And Chevron CEO Michael Wirth wrote a letter to Biden Tuesday pointing out that the company works every day to “help provide the world with the energy it demands and to lift up the lives of billions of people who rely on these supplies.”

He continued,

“Notwithstanding these efforts, your Administration has largely sought to criticize, and at times vilify, our industry. These actions are not beneficial to meeting the challenges we face and are not what the American people deserve.”

Energy Secretary Jennifer Granholm will meet with the top seven refineries later this week about how the federal government can assist in increasing refining capacity.

Biden’s ex-boss, former President Barack Obama, called a gas tax a “gimmick” on the campaign trail back in 2008. At the time Obama said a gas tax holiday was a “gimmick” to save Americans half a tank of gas over the summer so that lawmakers could “say that they did something.”

There is also concern about a gas tax vacation impact on already record-high inflation. The Committee for a Responsible Federal Budget, a non-partisan group that advocates for reducing the federal budget, previously argued that suspending the tax for a 10-month period could actually increase demand for gasoline and other goods and services when the economy is already confronting high consumer demand and pandemic-induced supply chain disruptions.

“While the gas tax holiday may reduce prices at the pump, it will further increase demand for gasoline and other goods and services at a time when the economy has little capacity to absorb it,” the blog post said. “The result could be even higher rates of inflation in 2023.”