White House Considers Federal Gas Tax Holiday as Oil Prices Approach $100 a Barrel

jhorrocks / Getty Images/iStockphoto

Faced with surging oil and gasoline prices that threaten to stall the country’s economic recovery, the White House and leading Democratic lawmakers are considering a federal gas tax holiday that would keep prices at the pump from rising much higher.

See: Unemployment: One Year Into the Biden Administration, How Have the Numbers Changed?
Find: Oil Moves Closer to $100 a Barrel — What Does It Mean for Gas Prices?

A group of Senate Democrats introduced a bill that would suspend the gas tax — currently about 18 cents per gallon — for the remainder of the year, The Washington Post reported on Wednesday. The White House responded to the proposal by saying that “all options are on the table” in terms of reining in high inflation.

Prices of Dated Brent Crude rose to about $99 a barrel earlier this week amid fears of a Russian invasion of Ukraine, Bloomberg reported. But prices later dipped when Russia said some of its troops are returning to their permanent bases, easing the geopolitical tensions that caused prices to move higher.

More: Why the Price of Avocados Is About to Rise — And It’s Not Inflation

Even so, the current Brent price of around $95 a barrel is its highest in years. And, as GOBankingRates previously reported, some analysts think the price could hit $125 by the fourth quarter — a development that would also push gas prices to historic highs.

Make Your Money Work for You

The White House has already made moves to keep gas prices down. In November, President Joe Biden released 50 million barrels of oil from the country’s Strategic Petroleum Reserve, which only happens in extreme circumstances. His administration is also looking into whether consolidation in the oil and gas industry has contributed to higher prices at the pump, and whether antitrust regulators should investigate further.

2022 Stimulus Checks: Is Your State Giving Out Money This Year?

Average prices at the pump topped $3.48 per gallon last week, WaPo reported, citing data released Monday by AAA. That’s up by about $1 from a year earlier. Pausing taxes at the pump would go a long way toward easing gas prices, and helping American families who are already struggling with inflation that has been running at about 7.5%.

A federal gas tax holiday might have a hard time getting congressional approval, though. That’s mainly because gas taxes help fund federal highway improvements — something many lawmakers consider more important than high gas prices right now.

More From GOBankingRates