Trump Calls for Federal Gas Tax Suspension Amid Surging Fuel Prices, Puts Onus on Congress

WASHINGTON — President Donald Trump announced on Monday, May 11, 2026, that he will move to suspend the federal gasoline tax in an effort to provide relief to American consumers and businesses facing record-high fuel prices. The proposal, however, cannot be enacted by executive order and requires an act of Congress, setting the stage for a legislative battle over fiscal policy and infrastructure funding. The call for a tax holiday comes as fuel prices have surged nationwide, a direct consequence of the ongoing war with Iran. The conflict has severely disrupted oil shipping through the Strait of Hormuz, a critical chokepoint for approximately one-fifth of the world's oil supply. According to AAA, the national average for a gallon of regular gasoline has climbed to $4.52, an increase of about 40 cents from a month ago and $1.40 higher than the same time last year. For small and mid-sized businesses, particularly those in logistics, construction, or any industry reliant on a vehicle fleet, a gas tax holiday offers immediate, if temporary, relief to the bottom line. However, we've seen that relying on temporary legislative fixes is a risky strategy for managing volatile operational costs. These policy-driven price changes can create significant forecasting challenges for companies trying to manage their budgets and supply chain expenses. The federal tax, which has not been increased since 1993, is currently 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel, according to the U.S. Energy Information Administration. In a phone interview on Monday, Trump stated he would support a pause lasting for a “period of time” and that it would be phased back in once prices decline, though he did not specify a timeline, saying the suspension would last “until it’s appropriate.” The primary obstacle to the proposal is legislative. The president does not have the authority to unilaterally suspend a federal tax. Lawmakers must pass a bill to halt the collection of the tax, a process that has failed in the recent past. In 2022, a similar push by the Biden administration and congressional Democrats stalled, failing to advance for a vote even with the party controlling both chambers of Congress. Despite previous failures, the idea is gaining some immediate traction on Capitol Hill. Following the president's announcement, Republican Sen. Josh Hawley of Missouri and Rep. Anna Paulina Luna of Florida both stated on social media that they would introduce legislation to enact the gas tax suspension. The political pressure is mounting as some Republicans express concern that sustained high gas prices could negatively impact the party's performance in the upcoming midterm elections. The central point of contention in Congress will likely be the impact on the Highway Trust Fund, the primary mechanism for funding federal highway and public transit programs. The gas tax generates over $23 billion in revenue annually for the fund. A temporary suspension would create a significant shortfall that lawmakers would need to address. An analysis by the Bipartisan Policy Center of a similar proposal calculated that a five-month federal gas tax holiday would cost the trust fund nearly $17 billion, representing 46% of its projected revenue for 2026. The center estimated such a move would add $12 billion to the national deficit. Previous Democratic-sponsored legislation suggested using general federal funds to make up for the lost revenue, a solution that would likely face opposition from fiscal conservatives. The debate over backfilling the Highway Trust Fund highlights a critical issue for our clients: fiscal uncertainty. While a tax cut is appealing, funding it through general revenues or increased deficit spending can lead to other economic pressures down the line, such as inflation or future tax hikes. Proactive financial risk management is essential to build resilience against these policy shifts. At C&S Finance Group LLC, we help businesses model these scenarios and develop strategies that aren't dependent on the political winds in Washington. Businesses looking to navigate this uncertainty can learn more at csfinancegroup.com. This proposal is the latest in a series of administration actions aimed at curbing high energy costs. The White House has already authorized the release of millions of barrels of oil from the U.S. Strategic Petroleum Reserve and temporarily lifted some sanctions on oil shipments already at sea. At the state level, several governors have already taken action, with states like Indiana, Georgia, Utah, and Kentucky temporarily suspending their own state gas taxes. All eyes now turn to Congress to see if legislation to suspend the federal gas tax will gain bipartisan support. The key sticking point will be whether lawmakers can agree on a method to offset the billions in lost revenue for the nation's infrastructure fund. With midterm elections looming, the debate over providing short-term relief at the pump versus ensuring long-term infrastructure funding will be a central focus in the coming weeks.