Lawmakers Propose Federal Gas Tax Holiday as Iran War Lifts Prices

As the Iran war pushes U.S. gasoline prices toward $4 a gallon, members of Congress have introduced legislation to temporarily suspend the 18.4‑cent‑per‑gallon federal gas tax (and 24.4 cents on diesel), which supplies more than $23 billion a year to the Highway Trust Fund. Democratic Sens. Richard Blumenthal and Mark Kelly’s Gas Prices Relief Act, along with a House companion from Rep. Chris Pappas, would pause the tax through Oct. 1 and backfill the trust fund with general revenues, a move transportation builders warn could swell the deficit and undermine long‑term highway and transit funding. President Donald Trump said at a March 27 Cabinet meeting that he has "thought about" a federal suspension but suggested states should consider cutting their own fuel taxes and called it an option "in our pocket" if needed. Industry groups cite research showing retailers often do not pass the full tax cut to drivers and stress that taxes are just one piece of complex pricing tied to global oil markets, undercutting claims this would meaningfully blunt war‑driven price spikes. The debate lands as the administration taps the Strategic Petroleum Reserve, eases sanctions on some Russian and Iranian oil already at sea, and seeks partners for a coalition to police the Strait of Hormuz, underscoring how energy policy, war strategy and domestic pocketbook politics are colliding.