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.
How Much Is the Federal Gas Tax?
The federal gas tax is 18.3 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.
Can the White House Suspend the Gas Tax?
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, according to BPC.
Would a Gas Tax Holiday Actually Help Drivers?
Any proposed tax holiday would have little effect on consumers. At 18.4 cents a gallon, it’s a drop in the bucket against the current national average of $4.52 a gallon.
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.”
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