President Joe Biden on Monday said he is “considering” the possibility of a federal holiday from gasoline taxes as the price of fuel across the country hovers around near-historic prices. 

What You Need To Know

  • President Joe Biden on Monday said he is “considering” the possibility of a federal gas tax holiday and hopes to make a decision "by the end of the week”

  • The current average price for a gallon of regular, unleaded gasoline is $4.98 across the country, according to AAA, down from a record-breaking $5.01 on June 13

  • The federal government taxes gasoline at 18.3 cents per gallon and diesel fuel 24.3 cents per gallon and a gas tax holiday would suspend those excise taxes for a predetermined period of time

  • Some in the Biden administration have been more reserved about the possibility of a federal gas holiday and how it could impact revenues needed for projects like road repairs 

“Yes, I'm considering it,” Biden told reporters Monday morning as he walked along Rehoboth Beach in Delaware. “I hope to have a decision, based on the data I’m looking for, by the end of the week.”

The current average price for a gallon of regular, unleaded gasoline is $4.98 across the country, according to the American Automobile Association, down from a record-breaking $5.01 on June 13. The federal government taxes gasoline at 18.3 cents per gallon and diesel fuel 24.3 cents per gallon.

A gas tax holiday would suspend those excise taxes for a certain, predetermined period of time. 

A number of states have adopted or proposed a moratorium on statewide gas taxes. So far, only a handful of state legislatures have adopted a gas tax holiday in one form or another, including Maryland, Georgia, Connecticut, New York and Florida. 

The idea has also gained traction in Congress in recent months as the cost of consumer goods like food and clothing are also on the rise, putting pressure on consumers’ pockets from multiple directions. 

Several different versions of a federal gas tax holiday have been proposed in both the House and the Senate – one of which would suspend the tax through the remainder of 2022 – but have yet to pass both chambers. 

Even treasury secretary Janet Yellen said a federal gas tax holiday is “worth considering,” adding that the Biden administration is willing to work with Congress on the issue. 

"That's an idea that's certainly worth considering," Yellen said of a potential federal gas tax holiday during an appearance on ABC’s “This Week” on Sunday. "If Congress will work with him to enact some of the administration's programs, we can bring down other costs that are burdening households, like prescription drugs, health care costs, and increase the supply of affordable housing.” 

But others in the Biden administration have been more reserved about the possibility of a federal gas holiday and how it could impact revenues needed for projects like road repairs. 

"Part of the challenge with the gas tax, of course, is that it funds the roads, and we just did a big infrastructure bill to help fund the roads," Energy Secretary Jennifer Granholm said on CNN’s “State of the Union” on Sunday. “So if we remove the gas tax, that takes away the funding that was just passed by Congress to be able to do that."

Granholm is not the only person to warn that a federal moratorium on gas taxes could have negative, unforeseen impacts on Americans. 

In a report issued in February, the Committee for a Responsible Federal Budget found a federal gas tax holiday could reduce gas tax revenues by up to $20 billion, depending on when and how the moratorium is enforced. 

“While the gas tax holiday may reduce prices at the pump, it will further increase demand for gasoline and other goods and services at a time when the economy has little capacity to absorb it,” the committee said in part. “The result could be even higher rates of inflation in 2023.”