U.S. President Biden delivers remarks on efforts to reduce high gas prices in the South Court Auditorium of the Eisenhower Executive Office Building June 22, 2022 in Washington, DC.
jim watson | AFP | Getty Images
President Joe Biden on Wednesday called on Congress to suspend the federal gasoline tax for 90 days as pump prices hit record highs.
The federal tax is currently 18 cents per gallon of regular gasoline and 24 cents per gallon of diesel fuel.
“I’m calling on businesses to pass this on – every penny of that 18-cent cut – back to the consumer,” Biden said Wednesday. “There is no more time to make profits,” he said.
The president said such a move would have no impact on the Highway Trust Fund, saying other revenues could be used to fund the approximately $10 billion cost.
Biden also called on states to suspend their gasoline taxes or find other ways to provide some relief.
Still, some were quick to note that suspending the gas tax would keep demand stable and not solve structural problems in the market.
Demand for petroleum products rebounded as global economies reopened, while supply remained constrained. A lack of refining capacity has also pushed prices up.
“I fully understand that the gas tax exemption alone will not solve the problem. But it will provide immediate relief to families. Just a little breathing space as we continue to work to bring prices down to long term,” Biden said. .
Prices are rising across the board with inflation at its highest level in 40 years, but the spike in gasoline prices is particularly notable. The national average for a tax gallon topped $5 for the first time earlier this month.
Biden called the price spike “Putin’s price hike.” He also blamed oil and gas companies for what he called prioritizing profits over consumers.
Last week he sent a letter to the CEOs of the biggest refiners urging them to increase production. Industry executives say that while they wanted to boost operations, they can’t due to labor shortages and other issues.
“[M]he message is simple: to the companies that operate gas stations and set these prices at the pumps, this is a time of war… these are not normal times. Reduce the price you charge at the pump to reflect the cost you pay for the product,” he said.
Biden said those actions could lower prices at the pump by $1 per gallon or more. “It won’t reduce all the pain, but it will be a big help,” he said.
Whether Biden’s call with winning support on Capitol Hill remains to be seen.
“While well-intentioned, this policy would provide minimal relief at best while digging a $10 billion hole in the Highway Trust Fund that would need to be filled if we are to continue fixing crumbling bridges, making address soaring road deaths, and build a modern infrastructure system,” said Rep. Peter DeFazio, an Oregon Democrat and chairman of the House Transportation and Infrastructure Committee.