Since President Biden took office, there has been a steady increase in the price of gas Americans pay at the pump. Hovering around $5 gallon in addition to a 40-year high inflation, this squeeze on American pocketbooks is a top concern across the public.
In response to these growing concerns, the president has offered a series of solutions that to date have failed to provide any meaningful relief. This has included blaming Putin, initiating the highest ever release of the Strategic Petroleum Reserve, waiving certain blending requirements through the summer, asking OPEC and Venezuela to increase global supply, and sending threatening letters to the industry to produce and refine more oil and gas.
The latest solution from President Biden includes providing a holiday from the federal gas tax. As Congress considers this request, it begs the question: will a three-month pause to the gas tax provide any meaningful relief?
President Joe Biden
Mostly false or misleading. Significant errors or omissions. Mostly make believe.
No, a three-month holiday from the 18.4 cent federal gas tax consumers pay at the pump will not provide any meaningful relief and will actually make the price hike worse in the long run. While it may provide some minor, short-term relief, a federal gas tax holiday does nothing to address the underlying cause of high gas. One analysis found that the average driver of an SUV would save about $4.60 per week producing a less than 4% savings per gallon. Moreover, this slight price relief over three months would likely increase demand, ultimately exacerbating current supply issues making an even greater price hike more likely in the long run.
In 2008, former President Obama made clear that a federal gas tax holiday is nothing more than a “gimmick” explaining that it would not provide any real relief and was not a “truthful response to the challenges that we face in America.”
It’s also important to understand that the gas tax exists to provide funding support for roads, bridges and other foundational aspects of our transportation system. A three-month holiday would cut off about $10 billion in funding necessary to maintain this type of critical infrastructure.
Most problematic, a gas tax holiday will not address the root cause of high prices. It is the president’s day-one commitment to “ban fossil fuels” which has put our country in a state of energy vulnerability. Canceled pipelines like the Keystone XL Pipeline, attempted moratoriums on federal lands, new red tape and constant, anti-fossil energy rhetoric from top Biden officials has significantly reduced domestic supply. New and pending regulatory requirements have also made it very difficult for our nation’s refiners to respond to the sudden increase in demand.
Instead of offering the American public gimmicks that will end up causing more harm in the long run, President Biden has a menu of options he could choose from to provide meaningful relief. Republican leadership recently released a plan for how they will tackle the issue to restart the economy, provide price relief, and protect the environment. He could immediately start working with Republicans to implement parts of that plan such as passing H.R. 6858, which includes a series of tangible actions that could responsibly unleash our domestic energy resources. Outside of Congress, the president could take up any one of the many actions proposed by both state-based and national organizations that could provide effective and immediate relief to the American people.
The Secretary of Energy has convened an emergency meeting with oil and gas company CEOs today. Hopefully this time, the talk will lead to substantive, long term action that actually provides gas price relief.