Home Business Economy & Politics President Joe Biden Calls for Three-Month Gas Tax Holiday

President Joe Biden Calls for Three-Month Gas Tax Holiday

President Joe Biden has called for a three-month suspension of the federal gasoline tax in response to the country’s soaring energy prices.

The average cost of a gallon of gas, or petrol, is hovering near $5, up from roughly $3 a year ago.

With national elections for Congress coming in November, President Biden is under pressure to respond.

Analysts say that removing the levy would have limited impact on household petrol and diesel costs.

Political support for the gas tax holiday, which would require an act of Congress, is also uncertain.

President Biden said policymakers should do what is in their power to try to ease the strain on families, calling on companies to pass on “every penny” in savings to the public.

“I fully understand that a gas tax holiday alone is not going to fix the problem,” he said.

“But it will provide families some immediate relief, just a little bit of breathing room as we continue working to bring down prices for the long haul”.

Photo AP

Currently, the US imposes a tax of roughly 18 cents per gallon on gasoline and 24 cents on diesel, using the money collected to help pay for highway infrastructure.

Eliminating the levy through September, as President Biden has proposed, would cost the government an estimated $10 billion.

The move is the latest effort from countries around the world to address the soaring energy costs.

Oil prices have surged since last year, as demand outstrips supplies constrained by cuts that many firms made after the pandemic hit in 2020 and prompted demand to crater.

As the war in Ukraine pushes Western countries to shun oil from Russia – a major energy producer – that has also contributed to the crunch.

The American Fuel and Petrochemical Manufacturers industry group said a gas tax holiday would provide “near-term relief but it won’t solve the root of the issue – the imbalance in supply and demand for petroleum products”.

President Biden has already taken steps like releasing unprecedented amounts of oil from national stockpiles and lifting taxes on imports of solar panels.

As well as suspending the national gasoline tax, President Biden is urging similar steps by state governments, which typically impose their own taxes, often higher than the federal government’s.

Some states, including New York, have already suspended those charges.

The president, who has intensified his criticism of oil and gas companies in recent weeks, also called on the industry to increase output and refining capacity, while directing some of his pleas to gas station owners across the country.

“These are not normal times,” he said, pointing to the war in Ukraine and noting that oil prices have retreated from earlier highs.

“Bring down the cost at the pump to reflect the price you are paying for the product. Do it now, do it today”.

The price of gasoline in the US is already lower than in many other countries.

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.