According to a senior administration source, US President Joe Biden will call on Congress on Wednesday to adopt a three-month suspension of the federal fuel tax to assist battle record pump prices.

According to the official, the president will also call on states to temporarily suspend state fuel taxes, which are frequently higher than federal rates, and he will challenge major oil companies to come to a meeting with his energy secretary later this week with ideas on how to bring idled refining capacity back online.

For months, Biden and his aides have been debating the topic amid mounting pressure to move to address record-high gas prices, which have dragged on the president’s poll ratings and thrown a pall over Democrats’ hopes of keeping legislative control in November’s elections.

A suspension of the federal fuel tax of 18.4 cents per gallon and the diesel tax of 24.4 cents would need legislative approval, making Biden’s support for the proposal mostly symbolic.

Lawmakers from both parties have voiced opposition to suspending the tax, with several Democrats, including House Speaker Nancy Pelosi, concerned that the measure would have little impact on pricing and that oil firms and merchants would pocket the majority of the savings.

“A federal gas tax suspension alone won’t fix the problem we face, but it will provide families a little breathing room as we continue working to bring down prices for the long haul,” a second official said.

According to the person, Biden will urge Congress to defer the gasoline tax until September, which would cost the Highway Trust Fund around $10 billion in lost income. The White House thinks it can make up the lost money from other sections of the budget, which is seeing revenue increase and deficits reduce as the US recovers from the COVID-19 epidemic.

Some states, like New York and Connecticut, have already suspended state gasoline taxes, while others are considering consumer refunds and direct assistance.

The announcement, which would be made in an afternoon address, was initially reported on Tuesday night.

Refiners are failing to fulfill worldwide demand for diesel and gasoline, which is compounding high prices and exacerbated shortages.

Pump prices in the United States are approaching $5 a gallon, as rising demand for motor fuels combines with the loss of approximately 1 million barrels per day of processing capacity. Many factories were shutdown in the previous three years as fuel consumption plummeted during the COVID-19 epidemic.

Source: Reuters


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