Gas Tax Holiday by Joe Biden is trending all over the internet. On Wednesday, during a speech at the White House, the U.S president insisted Congress put a pause on federal gasoline and diesel taxes for three months.
This call to suspend the federal gasoline tax was against the new actions to strike one of the biggest drivers of inflation. Biden needed the new legislation from Congress to discontinue the tax until September to provide savings for customers more quickly and increase the refining capacity.
U.S president Calls Congress To Pause Gas Tax For Three Months
According to Biden’s subordinates, the series of actions taken made a possibility of reducing the cost of a gallon of gas by around $1. But each step taken will have to face an uphill battle from the lawmakers on Capitol Hill to the administrators at the top gas companies.
During the speech on Wednesday, Biden expressed that by pausing the federal gas tax, it is possible to bring down the gas price and even could bring a little relief to families. According to him, if savings on federal tax on gas is fully passed to the consumers, then people can save about $2.76 for a 15-gallon.
Even though Joe Biden pushes forward this proposal through Congress, it is not yet clear whether the lawmakers, including some Democrats, are doubtful and even the opposite.
The price of gasoline has increased drastically in the previous months. As per the American Automobile Association, the prices have reached around $5 per gallon from $3 just a few months ago. The price rise was due to several factors and the most significant trouble was caused by the disruptions in the global oil market following Russia’s invasion of Ukraine.
With the new proposal made by Joe Biden, it is expected to pause the federal gas tax for three months. Also, this possesses compensations to avoid any negative effect on the Highway Trust Fund that was unsettled in recent years and was highly supported by gas taxes. As per the latest estimate by the White House, the three-month hiatus of the federal gas tax of 18.4 per gallon would cost roughly $10 billion in total.
Several industry experts have censured the consequences of the hiatus. Lipow Oil Associates President Andrew Lipow stated that the gas tax hiatus will only bring less impact on the customers. If the proposal gets passed, then it would result in other recent actions from the white house which could make a huge effect on the gas prices, that include the discharge of 1 million barrels/day from the Strategic Petroleum Reserve.
The U.S President has even asked the states to take parallel actions to suspend their gas taxes which many have considered already. Oil companies are also in focus as the president is ready to put the companies under pressure to pass along savings more fastly. He even asked the refining companies to increase their output in the coming months. In his speech on Wednesday, Biden asked the oil companies to pass along “every penny” in savings they receive.
