President Joe Biden will announce a proposal to suspend the federal gasoline and diesel tax for three months in response to soaring energy prices.
The White House will call on Congress to temporarily lift the 18-cent-a-gallon levy on gas and 24-cent-per-gallon tax on diesel through the end of September.
Biden’s plan will also urge states to either suspend their gas taxes or offer some type of consumer relief, including rebates. The federal plan does not include relief payments.
In addition, the administration is urging the oil and gas industry to generate more supply and bolster refining capacity. He is also calling on retailers to lower their prices and pass the savings onto consumers.
Biden is scheduled to deliver remarks at 2 p.m. on Wednesday.
When all of these actions are combined, the White House projects that prices at the pump could decline by as much as $1 per gallon. This figure was calculated by considering the 18-cent federal gas tax, potential state relief that could average about 30 cents, retailers lowering prices by 25 cents, and nudging refiners to deploy their record profits to cut prices and expand capacity, which would result in about 66 cents in savings, according to a senior administration official.
“Gas prices are up almost $2 per gallon since Putin accelerated his military buildup,” the official told reporters in a conference call. “[T]he president promised and remains committed to doing everything he can to reduce the impact of the price hike on the American people.”
Summer Driving Season
With the summer driving season getting started and the exceptional costs that families and motorists are facing right now, the suspension is meant to address this “unique moment” in America, according to the White House.
“COVID and Putin have just thrown energy markets more broadly and certainly oil and refined products whether you’re talking gasoline or diesel, completely out of whack,” another senior administration official noted, adding that the president desired to employ every possible measure to alleviate the financial strain households are enduring in this environment.
By Andrew Moran