The federal government collects $0.18 per gallon of gasoline (about 3.79 liters) and $0.24 per gallon of diesel. By lifting that tax over the next 90 days, Biden hopes to mitigate the effects of the sharp price hikes of recent months.
Other countries have already preceded the United States in lowering taxes and excise duties on gasoline. It remains to be seen whether the measure will actually bring relief. In the Netherlands, excise duties on fuel went down on April 1, but the price for a liter of petrol broke a new record earlier this month. Economists point out that a tax cut will only push up demand for petrol and diesel while supply is tight, pushing prices further higher.
Sore point
For Biden, high inflation has become a politically sore point. Republicans criticize the Democrat for declining American purchasing power. The proposal to abolish the tax on petrol is therefore mainly seen as a strategic move. If Republican members of Congress block the measure, they could be accused of doing nothing concrete about the high inflation.
Biden often points out that high oil and gas prices are the result of the Russian invasion of Ukraine. “The simple truth is that fuel prices have soared nearly $2 a gallon due to Vladimir Putin’s brutal attack on Ukraine. We’re not going to let that get to us.” In retaliation for the attack on Ukraine, the US announced it would no longer import fossil fuels from Russia.