With the national average landing at just under five dollars per gallon, Biden will urge lawmakers on Wednesday (June 22) to pass a gas tax holiday that would run for the next three months. The federal government currently charges consumers 18.4 cents per gallon of regular gas and a 24.4-cent tax per gallon of diesel.
The gas tax holiday would almost immediately lower the cost of gas, but potentially make prices higher in the future as the supply-demand chain could become even more imbalanced, experts say.
Suspending the federal tax would cost the White House $10 billion, which experts warn could cut funds for the maintenance of roads and highways.
“As a motorist, I’ll take any price reduction I can get,” energy analyst Patrick De Haan said. “As an analyst, I think it could exacerbate imbalances that could lead to higher prices.”
The federal gas tax started in 1932 at 1 cent per gallon and reached its current cost of over 18 cents in 1993. The added cost for drivers at the pump goes to the Highway Trust Fund, which pays for the maintenance of highways, roads, and bridges.
The federally-imposed tax has yet to be suspended since its inception. Biden's proposal of a gas tax holiday, which will call for a suspension through September, would have to successfully pass through Congress and be signed into law by the president.
According to the White House, Biden will also urge states on Wednesday to suspend their gas taxes to give added relief to drivers at the pump.