What is the Trump administration's proposed approach to suspending the federal gas tax, and why are they considering a phased return?

The Trump administration is working with Congress to suspend the federal excise taxes on gasoline (18.4 cents per gallon) and diesel (24.4 cents per gallon), with plans to implement a gradual, multi-year phase-in of the taxes to avoid triggering a consumer rush to buy fuel before the holiday ends—a concern that could lead to supply shortages. A senior administration official stated that talks are focused on drafting the suspension to provide relief without causing unintended consequences, and President Trump has called for the suspension 'until it’s appropriate.'

How do recent fuel price increases compare to pre-conflict levels, and what role is the Iran war playing in this surge?

Unleaded gasoline averaged $4.53 per gallon—up 52% since the start of the Middle East conflict—while diesel rose 50% to $5.65 per gallon nationwide, according to AAA; the news attributes this surge to Iran effectively closing a critical artery for global energy shipments amid the war.

Trump Team Seeks Extended Gas Tax Holiday with Phased Return

May 19, 2026

The Trump administration is negotiating with Congress to suspend federal excise taxes on gasoline and diesel amid soaring fuel costs driven by the Middle East conflict. Proposed plans include a phased tax restoration over months to prevent supply shocks while providing consumer relief.

bloomberg

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