Pausing federal gas tax would bring little relief to gas prices, experts say

With gas prices stuck above $4, the White House is considering suspending the federal gas tax. But analysts say such a move would offer little relief to consumers – and erode a source of revenue that matters for transportation infrastructure and the federal budget.

The federal gas tax is 18.4 cents per gallon for gasoline and gasohol (fuel made of unleaded gasoline and ethanol), and 24.3 cents per gallon for diesel. The taxes fund federal transportation spending through the Highway Trust Fund. They are separate from taxes levied at the state level, some of which have already been suspended.

Although the White House has floated the idea of using an executive order to suspend the federal tax, only Congress can make changes to how the Highway Trust Fund raises revenue. Lawmakers have introduced such legislation as prices have surged this spring, including the Gas Prices Relief Act of 2026.

But a mid-April analysis from the Bipartisan Policy Center found that suspending the federal gas tax for five months, as the bills suggest, would result in a $17 billion loss of revenues.

To plug that hole, the proposed legislation would transfer funds from the federal general fund to the Highway Trust Fund. Because consumers would have a little more left over to spend of their paychecks, a five-month suspension would increase federal deficits by $12 billion, BPC reckoned.

"This is the primary funding source for building new roads, for maintaining the roads that we already have, and for just supporting transportation infrastructure in this country," said Adam Hoffer, director of excise tax policy at the nonprofit Tax Foundation.

Meanwhile, Hoffer added, "Americans are driving more than ever. We want our roads to be pothole-free and safe to drive on. And in order to have those roads and more roads over time, we need funding."

"The traditional justification for the gas tax is that when you fill up, it’s the price you’re paying for driving on the roads," said Kyle Pomerleau, a senior fellow at the right-leaning American Enterprise Institute.

Connecting consumer use of the roads and a use tax is "fair and efficient," Pomerleau told USA TODAY. He and many other analysts point out that the current tax hasn't been increased in decades, so suspending it now would just exacerbate the problem of ongoing deficits.

Will a gas tax holiday help consumers?

Any tax holiday, meanwhile, would have little effect on consumers. At 18.4 cents a gallon, it's a drop in the bucket on the current national average cost of $4.52 a gallon.

"It’s just another negative for the consumer in terms of the cumulative inflation they’ve had to deal with," said Kenneth Kim, a senior economist with KPMG LLP.

"Last year it was tariffs and this year it’s higher energy costs," Kim added. "The consumer is under duress, and lower-income consumers are hurting in this environment."

And some analysts think there's fresh pain at the pump ahead.

"Many states could see another round of price cycling in the days ahead, potentially sending the national average toward the $4.65-per-gallon mark if oil continues climbing," said Patrick De Haan, head of petroleum analysis at GasBuddy, in a May 11 note.

"In addition, diesel prices across much of the Great Lakes region are nearing new record highs as ongoing refinery issues continue to disproportionately impact diesel production. Should geopolitical tensions escalate further, fuel prices could rise even more sharply in the weeks ahead.”

There may be a more commonsense approach to reducing the pain at the pump, said Rob Thummel, senior portfolio manager at $9 billion-Tortoise Capital, in emailed remarks.

"A more effective path to improving affordability would be a diplomatic solution to the Iran war that includes reopening and stabilizing access through the Strait of Hormuz," Thummel wrote. "If global oil markets regain confidence that oil and refined products can move freely, crude prices could fall, likely pulling U.S. gasoline and diesel prices down by significantly more than the 18.4-cent federal gasoline tax."

This story is developing.