Trump Pushes to Suspend Federal Gas Tax as Iran War Enters 11th Week and US Fuel Prices Hit Four-Year Highs Amid Strait of Hormuz Disruption
US President Donald Trump on Monday announced his intention to suspend the federal gasoline tax as fuel prices across the United States continue to climb amid the ongoing war with Iran, now in its 11th week. Trump told CBS News in an exclusive interview that he wants the tax suspended “for a period of time” and would reintroduce it “when gas goes down” — a move that would provide modest but symbolically significant relief to American drivers while raising questions about the fiscal impact of losing over $23 billion in annual highway and transit revenue.
The federal gas tax is currently set at 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel. While these amounts represent only a small fraction of the total price at the pump — which has risen above $5 per gallon in many US states — the suspension would signal the administration’s commitment to addressing the economic fallout of the Iran conflict, which has disrupted global energy supplies and pushed crude oil prices above $105 per barrel.
Why Is Trump Pushing for This Now?
The timing of Trump’s announcement reflects the growing political pressure created by rising fuel costs. The Iran war, which began in early March 2026, has led to the partial blockade of the Strait of Hormuz — the narrow waterway through which approximately 20 per cent of the world’s oil supply passes daily. The disruption has sent Brent crude surging past $114 per barrel at its peak and created persistent volatility in global energy markets.
For American consumers, the impact has been felt directly at the gas pump. Average US gasoline prices have risen from approximately $3.60 per gallon in February to over $4.80 per gallon nationally, with prices exceeding $5.50 in California, Hawaii, and other high-cost states. The price surge has contributed to rising consumer anxiety and declining approval ratings for the administration’s handling of the economic consequences of the conflict.
Asked by reporters in the Oval Office how long the gas tax should be suspended, Trump responded: “Till it’s appropriate.” The open-ended nature of the proposal reflects the uncertainty surrounding the conflict’s resolution — particularly after Trump himself described the ceasefire as being “on life support” following Iran’s rejection of Washington’s latest proposal.
Congressional Support and Opposition
Crucially, the president cannot suspend the federal gas tax unilaterally. The tax is established by federal law, and any suspension would require an act of Congress. However, the proposal has already generated bipartisan legislative activity. Republican Senator Josh Hawley of Missouri announced on social media that he would introduce legislation to suspend the gas tax, while Representative Anna Paulina Luna, a Republican from Florida, said she would introduce a companion bill in the House.
Democrats have previously sponsored similar legislation during periods of high fuel prices. Senator Mark Kelly of Arizona and Representative Ro Khanna of California both introduced gas tax suspension bills in 2022, and their offices indicated they would consider supporting a renewed effort if the proposal included provisions to maintain highway funding through alternative sources.
The bipartisan interest reflects the political reality that rising fuel costs affect voters across the ideological spectrum. However, fiscal conservatives within both parties have expressed concerns about the impact on the Highway Trust Fund, which is the primary federal mechanism for funding road construction, bridge maintenance, and public transit projects across the country. The fund receives approximately $23 billion annually from the gas tax, and any suspension without an alternative revenue source would create an immediate funding gap.
How Much Would Drivers Save?
The practical savings for individual drivers from a gas tax suspension would be modest. At 18.4 cents per gallon, an average American driver who fills up a 15-gallon tank would save approximately $2.76 per fill-up. For a typical household that fills up once a week, the annual savings would amount to roughly $143 — a meaningful but not transformative amount in the context of overall household budgets.
Energy economists have also cautioned that the full 18.4 cent reduction may not be passed through to consumers, as gas station operators and fuel distributors could absorb some of the tax reduction as additional margin. Studies of previous state-level gas tax suspensions have found that consumer pass-through rates vary significantly, with some analyses suggesting that only 70-80 per cent of the tax cut reaches the pump price.
Global Impact and India Connection
The gas tax proposal is part of a broader set of measures the Trump administration is considering to mitigate the economic impact of the Iran war. Energy Secretary Chris Wright said the administration was “open to all ideas” and described the gas tax suspension as one of several options being evaluated. Other proposals reportedly under consideration include releasing additional barrels from the Strategic Petroleum Reserve, increasing domestic drilling permits, and negotiating emergency oil supply agreements with Saudi Arabia and other OPEC producers.
For India, the US fuel price crisis is a mirror of its own challenges. Prime Minister Modi’s recent appeal for work-from-home arrangements and fuel conservation reflected the same pressure that is now driving the Trump administration’s gas tax proposal. Both the world’s largest and third-largest oil consumers are grappling with the economic consequences of a conflict that has disrupted the global energy supply chain in ways not seen since the 1970s oil embargo.
The coming weeks will determine whether the gas tax suspension moves from a political proposal to legislative reality. With crude oil prices showing no signs of a sustained decline and the Iran conflict continuing to disrupt global energy markets, the pressure on both the US and Indian governments to provide tangible relief to consumers is likely to intensify regardless of the diplomatic outcome in the Middle East.
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