The Trump administration signalled on Sunday that it is willing to consider suspending the 18.3-cent federal gasoline tax as pump prices hit a national average of $4.52 (£3.33) per gallon, their highest point in four years.

Energy Secretary Chris Wright told NBC's Meet the Press that the White House is 'open to all ideas' to bring down fuel costs for American households, including a temporary halt to the levy that has remained unchanged since 1993.

'All measures that can be taken to lower the price at the pump and lower the prices for Americans, this administration is in support of,' Wright said. 'We're open to all ideas.'

The federal gas tax stands at 18.3 cents per gallon for petrol and 24.3 cents per gallon for diesel. If suspended today, the national average would drop from $4.52 to roughly $4.34 (£3.19) per gallon. For a driver filling a 15-gallon tank, that translates to about $2.75 (£2.02) in savings per visit to the pump.

But research suggests even that modest relief may not fully reach consumers. A2022 Penn Wharton Budget Model studyanalysing state-level gas tax holidays in Maryland, Georgia, and Connecticut found that only 58% to 87% of the tax savings were passed on to drivers. The rest was absorbed by fuel wholesalers and distributors. Those findings mean the 18.3-cent saving could shrink to as little as 10 to 15 cents at the pump in practice.

Any suspension would also punch a hole in federal infrastructure funding. The Bipartisan Policy Center estimates that a five-month pause on the gas tax would cost the Highway Trust Fund (HTF) approximately $17 billion (£12.5 billion), or 46% of the fund's total projected gas and diesel tax revenue for fiscal year 2026.

The HTF finances federal spending on roads, bridges, and public transit across all 50 states. It has already required $275 billion (£202 billion) in general fund transfers since 2008 to stay solvent, and the Congressional Budget Office projects it will be fully depleted by 2028 without reform.

Three US states haven't waited for Washington. Georgia suspended its 33-cent state gas tax for 60 days starting in March. Indiana's Governor Mike Braun went further on 6 May, suspending both the state's excise and sales taxes on fuel simultaneously, saving drivers nearly 60 cents per gallon. Utah signed a 15% reduction to its state gas tax through the end of 2026.

Internationally, Canada suspended its federal fuel excise tax entirely on 20 April, cutting 10 cents per litre off petrol prices through 7 September.

Wright declined to predict whether gas prices could reach $5 (£3.68) per gallon during summer but acknowledged that prices 'will remain up while this conflict is in place.' He had previously told the same programme in March that there was a 'very good chance' prices would fall below $3 (£2.21) before summer.

Source: International Business Times UK