"Silly Proposal": Biden's Call To Suspend Gas Tax For 3 Months To Rein In Skyhigh Petrol, Diesel Prices In U.S Faces Ridicule

by India Infrahub - Jun 23, 2022 11:33 AM +05:30 IST
"Silly Proposal": Biden's Call To Suspend Gas Tax For 3 Months To Rein In Skyhigh Petrol, Diesel Prices In U.S Faces RidiculeAmerican President Joe Biden
Snapshot
  • In a bid to provide some relief to consumers reeling under soaring energy prices, President Joe Biden on Wednesday (Jun 22) urged the United States Congress to suspend the federal gas tax.

In a bid to provide some relief to consumers reeling under soaring energy prices, President Joe Biden on Wednesday (Jun 22) urged the United States Congress to suspend the federal gas tax.

Right now, the U.S federal government charges an 18-cent tax per gallon (1 gallon=3.78 litres) of petrol and a 24-cent tax per gallon of diesel. The taxes fund highways and public transportation through the Highway Trust Fund. But with gas prices spiking to $5 a gallon on average across the country, Biden called for suspending the gas tax for three months – until the end of September – to give Americans a little extra breathing room.

Biden claimed the tax could be suspended without harming the highway trust fund.

"With the tax revenues up this year, and our deficit down over $1.6 trillion this year alone, we'll still be able to fix our highways and bring down prices of gas," said Biden. "We can do both at the same time."

Biden had previously considered the tax holiday proposal in February but did not pursue

The president said he is also "calling on states to either suspend the state gas tax as well, or find other ways to deliver some relief."

Biden continued to blame Russian President Vladimir Putin and the Russian invasion of Ukraine for rising energy costs.

"For all those Republicans in Congress criticizing me today for high gas prices in America, are you now saying we were wrong to support Ukraine?" Biden said. "Are you saying that we would rather have lower gas prices in America than Putin's iron fist in Europe? I don't believe that."

Biden, for his part, acknowledged that "a gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief."

"I call on the companies to pass along every penny of this 18-cent reduction to the consumers. There's no time now for profiteering," he also said.

Biden also reiterated his call for major U.S. refiners to get more gas to pumps, noting his energy secretary, Jennifer Granholm, is slated to meet with many of the refining companies on Thursday (Jun 23).

Tax holiday faces criticism from both Democrats and Republicans

Top Democratic lawmakers questioned the effectiveness of a gas tax holiday.

Democratic Representative Peter DeFazio of Oregon, the chairman of the House Transportation and Infrastructure Committee, said in a statement on Tuesday that it's a "shortsighted proposal that relies on the cooperation of oil companies to pass on minuscule savings to consumers."

"Suspending the federal gas tax will not provide meaningful relief at the pump for American families, but it will blow a multibillion-dollar hole in the highway trust fund putting funding for future infrastructure projects at risk," added DeFazio.

Senate minority leader Mitch McConnell termed the proposal an "ineffective stunt" and a "silly proposal."

"The price of gas has risen $2.60 since the Biden administration took office and launched its holy war on affordable American energy," McConnell said on Wednesday.

House Speaker Nancy Pelosi has been previously sceptical of the proposal, saying there was "no guarantee" that companies would pass on the savings to consumers, and the resulting shortfall in the Highway Trust Fund would have to get covered with other funding.

Previous Measures To Tame Energy Prices

In April, Biden announced the release of 1 million barrels of oil per day from the nation's strategic petroleum reserve for the next six months to keep the oil prices under control.

'I'm authorizing the release of 1 million barrels per day for the next six months -- over 180 million barrels from the Strategic Petroleum Reserve," Biden said, announcing the decision.

"This is a wartime bridge to increase oil supply until production ramps up later this year. And it is by far the largest release from our national reserve in our history," he said.

Biden vs Big Oil

In a letter to the president earlier this week, Chevron CEO Michael Wirth called for the White House to change its approach and asked his administration to stop vilifying the oil and gas industry.

Biden, however, hit back at Wirth, saying that the oil executive was "thin-skinned" about criticism from the White House.

"We ought to be able to work something out whereby they're able to increase refining capacity and still not give up on transitioning to renewable energy." Biden said.

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