The Trump administration is open to the possibility of temporarily suspending the gas tax to give Americans relief amid the fallout from the crisis in the Strait of Hormuz, according to Energy Secretary Chris Wright.
“We’re open to all ideas, everything has tradeoffs,” Wright told NBC’s “Meet the Press” on Sunday about the possibility of suspending the gas tax.
“All ideas to lower prices for American consumers and American businesses.”
Currently, the federal government imposes an 18.4-cent-per-gallon tax on gasoline — in addition to any state-level tax applied.
Wright didn’t elaborate on the tradeoffs of suspending the tax, which brings in roughly $36–$40 billion annually for the Highway Trust Fund, and hasn’t seen a rate change since the early 1990s.
While the move would provide short-term relief, it wouldn’t affect the much lower supply that have led to skyrocketing gas prices.
Already, Georgia, Indiana, and Utah, have paused their gas taxes.
At the moment, gas is hovering around $4.52 a gallon, according to the latest data from the American Automobile Association (AAA). Before the war in Iran broke out on Feb. 28, prices were below $3 a gallon nationally.
“I can’t predict the price of energy in the short-term or even the medium-term, but what we’re doing is ending a 47-year conflict,” Wright said, when pressed about whether prices at the pump could jump past $5.
“If you have a hostile, unstable power like that, you simply cannot allow them to have nuclear weapons. That was a consensus opinion all my adult life.”
Wright said the US and other countries tapped into their strategic petroleum reserves to stabilize oil markets amid the crisis in the Middle East.
Iran has sporadically opened fire on ships near the Strait of Hormuz, a critical chokepoint, where over a fifth of the world’s oil flows through annually, to deter ships from traveling through it.
Earlier this month, the Trump administration began “Project Freedom” to militarily escort commercial ships through the waterway. Shortly thereafter, that was put on pause due to supposed progress in negotiations with Iran.
“The US backed away, or just suspended briefly, Project Freedom, because of Iran’s concerns,” Wright explained. “Iran has one card. They can cause trouble in the Strait of Hormuz; they are keen to get a negotiated deal.”
“If we open that militarily without Iran, they have no cards left; they can cause trouble in the meantime. They said, ‘Wait, wait, wait, let’s talk. Let’s get a deal. We’re going to open this more quickly in a simpler fashion,’ and we’re given that chance to have a negotiated settlement, which is the best end here.”