Biden Considering Gasoline Tax Cut As Petrol Prices Soars To A Record High And His Approval Ratings Sinks To A New Low

With the average national prices nearing $3.50 per gallon, U.S President Joe Biden is reportedly considering a proposal to scrap federal taxes on gasoline (petrol).

Currently, the national average for the cost of a gallon of gasoline is nearly one dollar higher than it was at the same time last year. The prices of gasoline have increased 50% since Biden took office in early 2021.

The federal levy on petrol is 18.4 cents per gallon. The levy collected is transferred to Highway Trust Fund, which is used for road construction and maintenance and supporting mass transit.

The soaring energy prices are attributed as among the main drivers that have pushed U.S inflation to a 40 year high. Biden's approval ratings have seen a precipitous decline with the steep rise in consumer prices.

Biden admitted that the Ukrainian situation could adversely impact energy prices.

"I will not pretend this will be painless. There could be impact on our energy prices, so we are taking active steps to alleviate the pressure on our own energy markets and offset rising prices." Biden said in a statement released by The White House today (Feb 16),

Biden’s attempted to put pressure on OPEC and Russia, the principal oil producers, by getting America and the other big consumers to release crude oil from their strategic petroleum reserves in an organised fashion. But that has not significantly altered the energy prices.

In November 2021, Biden claimed that there was strong evidence of "anti-consumer behavior" by big oil including ExxonMobil and Chevro, and demanded a probe by Federal Trade Commission (FTC) into their "possible illegal conduct".

In a letter to FTC chairwoman Lina Khan, the president claimed that “gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining.”

Biden administration has also blamed the jump in oil prices due to cuts to production output by OPEC, calling on the oil cartel to ramp up production. But OPEC has repeatedly rebuffed pressures from the United States government to ramp up the global oil supply.

Gas Prices Relief Act

Two senators of the ruling Democrats, Mark Kelly and Maggie Hassan, introduced new legislation to suspend the federal gas tax by creating a federal gas tax ‘holiday.’

The proposed Gas Prices Relief Act seeks to halt the 18.4 cents per gallon gas tax levied by the federal government through the end of 2022.

The bill also calls for the Treasury Department to make sure the savings are passed on to consumers rather than the oil and gas companies.

Whither Climate Commitments?

Removing the levy on gasoline will be a huge setback for Biden's 'green agenda'. He has frequently spoken about ending fossil fuel subsidies and replacing it with incentives for clean energy production. Biden administration also proposed to extend tax credits for renewable energy while ending tax benefits for fossil fuels.

In Apr 2021, Biden will announce that the U.S will achieve a 50-52 per cent reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030. He also fulfilled his promise to rejoin the Paris Agreement (a promise full filled on Day 1) and committed that the U.S will achieve net-zero emissions economy-wide by no later than 2050.

Also Read: Biden’s Big Gamble: Broadside Against Big Oil, Releasing Strategic Reserves. Can President Tame Soaring Energy Prices?