U.S. President Joe Biden urged Congress on Wednesday to suspend the federal gas tax for 90 days. This comes as prices spike to record highs.
As of writing the federal gas tax is at 18 cents per gallon of regular gasoline and 24 cents per gallon of diesel.
“I call on the companies to pass this along — every penny of this 18 cents reduction — to the consumer,” the president stated on Wednesday. “There’s no time now for profiteering.”
Biden mentioned that a move like this has no impact on the Highway Trust Fund, adding that other revenues can be utilized as a source of funds for the $10 billion cost.
The president also urged states to suspend their taxes on gas or look for other ways to find relief.
Will a Federal Gas Tax Holiday Address Structural Market Issues?
However, some immediately noted that suspending the tax on gas will cause demand to remain steady but not address the structural issues present in the market.
The demand for petroleum products has increased as global economies start to reopen. However, supply is still constrained. The refining capacity, which is not enough, has also caused the prices to skyrocket.
“I fully understand that the gas tax holiday alone is not going to fix the problem. 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,” the president stated.
Given the inflation hitting a four-decade high, prices have increased across the board. However, the spike in gas prices remains to be especially notable. For the first time ever, the national average tax for a gallon went over $5 earlier this month.
Biden used the term “Putin’s price hike” to describe the price surge. Additionally, the U.S. president also said oil and gas companies are to blame for what he says is prioritizing profits at the expense of the consumers.
Whether the White House’s call will gain the support of Congress remains to be seen.