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Biden is considering a petrol tax holiday, but any remedies may be modest

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  • There’s not much the president can do to quickly lower gas prices, but President Biden can request a petrol tax holiday. This could reduce the price of pumps by about 18 cents per gallon.
  • If the petrol tax is suspended for a year, the average driver could save a whopping $ 90 a year, or about 18 bonus gallons of petrol.
  • Biden announced a trip to Saudi Arabia next month, and the global supply of oil will certainly be on the agenda.

    The average price of a gallon of gas has reached $ 4.97 nationwide, thanks to a 41% rise since Russia invaded Ukraine almost four months ago. A small portion (about 3.7%) of that total comes from the federal gas tax, which has long been set at 18.4 cents per gallon. President Biden said he was considering suspending the collection of the tax and could announce a decision shortly. He needs Congressional support and cannot unilaterally ask for it himself. Hill I will point out today.

    “Yes, I’m considering it.” Biden I told reporters Monday. “I want to make a decision based on the data. I’m looking for it by the weekend.”

    There is not much that the president can do to have an immediate impact on gas prices. Biden has already released some of its strategic oil supply to the market, with management members meeting with CEOs of major oil companies. Gas price within this week. Biden has announced plans to travel to Saudi Arabia next month, and global energy supply will certainly be a hot topic. But Viden can’t force Saudi Arabia to produce more oil, and Russia’s supply is out of reach due to sanctions against aggression, so petrol tax holidays do at least some action. Will show. Of course, such a move requires congressional approval and puts another potential wrench on the situation.

    Is the Gasoline Tax Suspension Really Useful?

    But what does abolishing the federal gas tax bring to everyday drivers? (State petrol taxes are dramatically different and a completely different story.) Depending on your gas usage, suspending your petrol tax could save you just under $ 100 a year. The average vehicle fuel economy in the United States is 27.35mpg, and the average driver carries 13,500 miles each year. This means burning about 494 gallons a year. Paying 18.4 cents cheaper per gallon saves about $ 91 a year. And only if oil producers and gas stations pass on the full reduction to their customers.

    Biden should know that reducing the petrol tax only provides a modest remedy for the driver. In fact, before Biden became Vice President President Obama opposed The gasoline tax will be abolished. When both Hillary Clinton and John McCain agreed with such a move during President Obama’s campaign, he said tax cuts were an easy way. “We’re discussing a mechanism that saves half a tank of petrol throughout the summer and allows anyone in Washington to say they’ve done something by tapping their backs,” Obama said. He said at the time. When Congress discussed the idea of ​​a gas tax holiday earlier this year, Senator Mitch McConnell repeated Obama’s words, calling it a gimmick.

    The federal gas tax was last raised in 1993, We have said For years, the current 18-cent levy is not enough to pay for well-maintained roads and bridges (the federal tax on diesel fuel is 24.4 cents). There were some brief discussions about raising the federal gas tax early on in President Biden, but we are far from that reality today.

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