Tuesday, July 5, 2022
HomeBusinessPresident Biden Urges Petrol Tax Holiday as Fuel Prices Bite

President Biden Urges Petrol Tax Holiday as Fuel Prices Bite

In reaction to the nation’s skyrocketing oil prices, US President Joe Biden has asked for a three-month suspension of the nation’s national gasoline tax.

A gallon of gasoline now costs around $5 (£4) on average, up from about $3 a year ago.

Mr. Biden is under pressure to answer since there will be national elections for Congress in November.

According to analysts, eliminating the fee would only have a minor effect on household fuel and diesel expenditures.

There is also a lack of political support for the gas tax holiday, which calls for a congressional resolution.

Members of Mr. Biden’s own party have expressed worries that the move will largely help oil and gas businesses, and a senior Republican senator on Wednesday called it a “gimmick” and declared it “dead on arrival.”

In an effort to lessen the burden on families, Mr. Biden said that governments should do all within their power. He also urged businesses to share “every cent” of their savings with the general public.

I completely recognize that a petrol tax holiday by itself won’t solve the issue, he added. But it will provide households some short-term respite and a little breathing room as we keep trying to lower prices over the long term.

In order to help pay for roadway infrastructure, the US now levies a tax on gasoline and diesel that amounts to around 18 cents per gallon and 24 cents, respectively.

According to Mr. Biden, removing the fee until September would cost the government $10 billion.

The action is the most recent attempt by nations to address the skyrocketing energy prices.

Since last year, oil prices have increased as demand has outpaced supply, which is hampered by cuts many businesses made when the epidemic struck in 2020 and caused consumption to collapse.

The conflict in Ukraine has forced Western nations to avoid Russian oil, a key energy provider, which has added to the shortage.

A gas tax holiday would offer “near-term respite, but it won’t address the source of the problem – the mismatch in supply and demand for petroleum products,” according to the American Fuel and Petrochemical Manufacturers business organization.

Before the president’s announcement, economist Jason Furman, who counseled former president Barack Obama, stated on Twitter that the holiday would probably only save American consumers “a few pennies.”

He said that any price cut would probably increase demand, driving prices back up. “Whatever you thought of the virtues of a gas tax holiday in February, it is a worse idea today,” he said.

On Wednesday, Daniel Moran, a New Yorker, filled up his RV at the gas station in preparation for this weekend’s camping vacation with his family.

Over the summer, his family often schedules at least two or three of these outings. But this year, he claimed, the rising cost of petrol will probably prevent them from going beyond one. He shook his head and handed the station employee an envelope containing $80.

The 52-year-old said, “That’s not even half a tank.” It’s quite challenging,

Brooklyn-based tire store owner Mr. Moran expressed doubt that the suspension of the federal fuel tax would have any impact, adding that New York had already implemented a similar strategy for its state gasoline tax.

He pointed to the station sign, where prices were shown well north of $5 per gallon, and remarked, “It’s continuing getting higher. Although I am aware that it is very difficult, I would like to see some price reductions.”

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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