Donald Trump Moves To Suspend Federal Gasoline Tax Amid Iran War Fuel Price Surge

President Donald Trump said Monday he will move to suspend the federal tax on gasoline to help Americans shoulder surging fuel prices caused by the Iran war, while Reuters reported the proposal requires congressional approval.

The federal gas tax is currently set at 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel, and the tax provides more than $23 billion per year in revenue for federal highway and public transit programs.

ABC News

Asked by reporters at the White House how long the tax should be suspended, Trump said, "Until it's appropriate."

As of Monday, the average national gas price was $4.52 a gallon, according to the AAA motor club, 50% higher than the average price of just under $3 a gallon before Trump began the war against Iran.

The Trump administration has released millions of barrels of oil from the U.S. Strategic Petroleum Reserve and temporarily lifted sanctions on some Russian and Iranian oil shipments already at sea, as it negotiates with countries reliant on Middle East crude to join a coalition to police the Strait of Hormuz.

New Jersey Gov. Mikie Sherrill said Tuesday the state will not suspend its gas tax because it is too important for funding transportation, and she said the gas tax is how her administration invests in infrastructure going forward.

Sherrill said at a news conference at Newark Penn Station that the federal gas tax holiday would subtract 18.4 cents a gallon from the pump price, but that the decision to do so is up to Congress, not the president.

Bloomberg Government News

The national average for a gallon of regular was $4.50 a gallon Tuesday and New Jersey’s average was $4.52, according to AAA, while Sherrill said the state fuel tax is 49.1 cents per gallon of gas and 56.1 cents per gallon of diesel fuel.

Sherrill said the state gas tax is expected to raise $2.139 billion in fiscal year 2026, which ends on June 30, and she added that the governor cannot unilaterally suspend the gas tax because the legislature would need to act.

Steve Sigmund, a spokesperson for Sherrill, said, "The governor cannot unilaterally suspend the gas tax, the legislature would need to act," as he argued the Trump administration’s actions "exponentially makes it very difficult."

Democrats introduced legislation in March to suspend the federal gas tax until October, but the proposal has stalled, and NBC News reported Sen. Josh Hawley introduced a similar bill Monday.

“Democrats are leaning into midterm affordability concerns by proposing a federal gas tax holiday as the ongoing conflict in the Middle East sends prices at the pump skyrocketing”

Bloomberg Government News

Hawley’s measure would suspend the 18.4 cents-per-gallon federal tax on gasoline and the 24.4 cents-per-gallon federal tax on diesel fuel for 90 days after enactment, and it would give the president the authority to extend the suspensions for 90 more days if he determined it was needed.

Rep. Anna Paulina Luna said Monday on X she would introduce a bill "to suspend the federal gas tax in light of Trump’s recent remarks," while Pappas responded to Trump’s support by saying on X, "This should have happened months ago."

The federal gas tax helps fund the Highway Trust Fund, and the Bipartisan Policy Center estimated that gas would most likely fall by 10 to 16 cents per gallon for consumers even if the tax were suspended.

NBC News also reported that on Monday the national gas price average was $4.52 per gallon, and it said gas prices have risen more than 50% since the start of the war in Iran.