Over 15 Million Engines and Transmissions
nationwide, the average price for a gallon of gas has reached $4.97, thanks to a 41 percent increase since russia invaded ukraine almost four months ago. a small portion of that total—around 3.7 percent—comes from the federal gas tax, which has long been set at 18.4 cents per gallon. president biden said that he is considering pausing the collection of that tax, and could announce his decision soon. he will need to have congressional support and can't unilaterally call for it on his own, as the hill points out today.
"yes, i'm considering it," biden told a group of reporters monday. "i hope to have a decision based on the data. i'm looking for by the end of the week."
there isn’t much a president can do to quickly affect gas prices. biden has already released some of the strategic petroleum supply to the market, and administration members are scheduled to meet with ceos of major oil companies to discuss the rise in gas prices later this week. biden has announced plans to travel to saudi arabia next month, and the global energy supply will certainly be a topic of conversation. but biden can't force saudi arabia to produce more oil, and with russian supplies out of reach due to sanctions for the invasion, a gas tax holiday would at least show some sort of action. of course, such a move would require congressional approval, putting another potential wrench in the situation.
but what would eliminating the federal gas tax do for everyday drivers? (state gas taxes vary dramatically and are another story altogether.) depending on your gas usage, pausing the gas tax would will likely save you just under $100 a year. the average vehicle's fuel economy in the u.s. is 27.35 mpg, and the average driver puts 13,500 miles on their car every year, which would mean they burn around 494 gallons a year. paying 18.4 cents less for each gallon would lead to an annual savings of, drumroll please, around $91. and that's only if the oil producers and gas stations pass along the full amount of the reduction to customers.
biden should know that reducing the gas tax will provide only modest relief to drivers. in fact, before biden became vice president, president obama came out against eliminating the gas tax. during obama's presidential campaign, when both hillary clinton and john mccain were in favor of such a move, he said lowering the tax is the easy way out. "we're arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in washington can pat themselves on the back and say they did something," obama said at the time. earlier this year, when the idea of a gas tax holiday was discussed in congress, senator mitch mcconnell echoed obama's words and called it a gimmick.
the last time the federal gas tax was raised was in 1993, and we've been saying for years that the current 18-cent levy is not enough to pay for properly kept-up roads and bridges (the federal tax on diesel fuel is 24.4 cents). there was some brief discussion about raising the federal gas tax early in biden’s presidency, but we’re a long way from that reality today.