President Donald Trump’s proposal to temporarily suspend the 18-cent per gallon federal gas tax may not provide significant relief to drivers, according to a leading fuel industry analyst.
Patrick De Haan, head of petroleum analysis at GasBuddy, argues the real burden on consumers is not the federal tax but what he calls the “Iran war premium,” which he estimates adds roughly $1.35 per gallon. He said the premium costs drivers about $571 million per day.
Trump confirmed the idea in a telephone interview with CBS News, calling it a “great idea” to lift the gas tax temporarily and phase it back in when prices fall.
The national average price for regular gasoline hit $4.50 on May 12, according to AAA, up sharply from $2.98 on Feb. 28, when U.S. military strikes against Iran began.
Any suspension of the federal gas tax would require congressional approval. Senator Josh Hawley (R-MO) plans to introduce legislation, while Democratic Senators have also proposed a suspension until Oct. 1.
The federal gas tax, currently 18.4 cents per gallon, has not been raised since 1993. Revenue funds the Highway Trust Fund for road and transit projects, but declining fuel consumption due to more efficient vehicles and EVs is creating a funding gap.
State gas taxes vary widely. California has the highest combined rate at 71 cents per gallon, with an average pump price of $6.15.