Trump proposes pausing federal gas tax to relieve consumers amid Iran war pressure

President Trump has thrown his weight behind suspending the federal gas tax, a move designed to ease the sting of fuel prices that have climbed past $4.50 per gallon for gasoline and $5.70 for diesel. The proposal lands as geopolitical tensions tied to the war in Iran continue to push energy costs higher.

The federal excise tax sits at 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel.

The legislative landscape

Sen. Josh Hawley, the Missouri Republican, introduced S. 4485, which calls for a 90-day suspension of the federal gas tax by setting it to zero.

On the Democratic side, Sen. Mark Kelly’s S. 4032 takes a longer view, proposing to suspend the gas tax until October 1, 2026. Rep. Brendan Boyle’s H.R. 8600 uses a different trigger entirely: the tax pause would kick in automatically when the national average price exceeds $3.99 per gallon.

Trump himself kept things characteristically vague on the timeline. “Yeah, I’m going to reduce… till it’s appropriate,” he said regarding the gas tax.

The $10 billion question

The federal gas tax feeds the Highway Trust Fund, which bankrolls road construction, bridge repairs, and transit projects across the country. Suspend the tax for a quarter, and the fund faces over $10 billion in lost revenue.

During state-level gas tax suspensions in recent years, studies showed mixed results. Some states saw prices drop by roughly the amount of the suspended tax. Others saw the savings partially absorbed by the supply chain before reaching drivers.

What this means for your wallet and your portfolio

For consumers, the immediate math is simple but small. At 18.4 cents per gallon, a driver filling a 15-gallon tank saves about $2.76 per fill-up. Over a 90-day suspension, that might add up to $30 or $40 for an average driver.

If Hawley’s 90-day bill gains traction, it could move quickly. If Congress defaults to the longer-dated proposals like Kelly’s October 2026 sunset, that suggests lawmakers are bracing for a prolonged period of high energy costs.

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