By Jarrett Renshaw
(Reuters) – U.S. President Joe Biden will call on Congress on Wednesday to approve a three-month suspension of the federal gasoline tax to help fight record pump pump prices, a senior administration official said.
The president will also call on states to temporarily suspend state fuel taxes, which often exceed federal rates, the official said, and he will challenge major oil companies to meet with his energy secretary later this week with ideas on how reduce unused refining capacity.
Biden and his advisers have been discussing the issue for months under mounting pressure to take action to tackle record high gas prices that have weighed on presidential polls and cast a dark cloud over Democrats’ chances of winning Congress. to keep in the November elections.
A suspension of the 18.4-cent-per-gallon federal gasoline tax and 24.4-cent diesel tax would require congressional approval, likely making Biden’s support behind the effort largely symbolic.
Lawmakers from both parties have expressed opposition to the tax suspension, with some Democrats, including House Speaker Nancy Pelosi, fearing the move would have a limited effect on prices and that oil companies and retailers could save much of the tax. savings would accrue.
“A suspension of the federal gas tax alone will not solve the problem we face, but it will give families a little breathing room as we continue to work to lower prices for the long term,” said a second official.
Biden will ask Congress to suspend the fuel tax until September, a move that will cost the Highway Trust Fund about $10 billion in lost revenue, the official said. The White House believes it can make up for lost revenue from other parts of a budget that are seeing revenues grow and deficits shrink as the United States emerges from the COVID-19 pandemic.
Some states, such as New York and Connecticut, have already stopped state fuel taxes, while others have had ideas such as consumer discounts and instant relief.
News of Biden’s announcement — which will come in an afternoon address — first came on Tuesday night.
Refineries are struggling to meet global demand for diesel and gasoline, driving high prices and increasing shortages.
Pump prices in the US are close to $5 a gallon as rising demand for motor fuels coincides with the loss of about 1 million barrels per day of processing capacity. In the past three years, many factories have closed as fuel demand collapsed at the height of the COVID-19 pandemic.
(Reporting by Jarrett Renshaw; editing by Ross Colvin and Christopher Cushing)