SAN ANTONIO – As gas prices continue climbing across the country, many drivers say even small savings at the pump could help stretch tight budgets.
President Donald Trump announced plans on Monday to suspend the federal gas tax as fuel prices rise during the ongoing war with Iran. The proposal would still require approval from Congress before taking effect.
If approved, drivers could temporarily save 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel, according to Patrick De Haan, petroleum analyst for Gas Buddy. The federal tax is separate from state gas taxes, which are often higher.
“Even those few dollars, to some people it makes all the difference,” driver Madison Eubanks said.
Eubanks said high fuel prices are already taking a toll on her finances.
“Paying more than $5 a gallon is a lot,” she said. “I’m spending at least $100 every time I fill up.”
Other drivers agree and mentioned they are also making changes to cope with rising fuel costs.
“I have to go to different gas stations just to save money,” one driver said.
That same driver said she traded in her truck for a more fuel-efficient vehicle.
De Haan said a federal gas tax suspension could lower prices relatively quickly — possibly within a day of taking effect — because the tax directly affects fuel as it is sold.
However, he said global oil prices will ultimately determine how much relief drivers actually see.
“It’s really what’s going on in the backdrop,” De Haan said. “Is the price of oil going up at the same time that this tax suspension becomes effective?”
De Haan said rising wholesale gasoline prices could offset the savings from the tax suspension, making any decrease at the pump less noticeable for consumers.
“If oil prices are falling at the same time of the suspension, then you could see the reduction at the pump,” De Haan said. “It really depends on timing.”
At current national averages, De Haan said the savings could still add up for drivers who fill larger vehicles or commute long distances.
“At $4.48 per gallon, an 18.4 cent reduction would still add up to a few dollars every fill-up, depending on how big your tank is,” he said.
The federal gas tax has remained unchanged since 1993 and serves as a major source of funding for highways, interstates and public transportation projects across the country. The tax generates more than $23 billion annually for federal transportation programs.
According to De Haan, suspending the tax could cost the federal government around $2.1 billion in lost revenue every month the suspension remains in place.
“The Federal Highway Trust Fund is already relatively low,” he said. “Gasoline and federal diesel taxes have not been increased since 1993.”
While lawmakers from both political parties have discussed ways to provide relief to drivers during periods of high fuel prices, the proposal would still need congressional approval before consumers see any changes at the pump.
For drivers like Eubanks, though, every dollar matters.
“Money that’s not going toward this can go to bills, rent, whatever,” Eubanks said.
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