Trump Pushes Federal Gas Tax Holiday Amid Iran War

President Donald Trump announced on May 11, 2026 that he would seek a temporary suspension of the 18.4-cent federal gasoline tax and the 24.4-cent diesel tax, saying the pause would last “until it’s appropriate.” Congressional approval is required.

CNBC

U.S. and Israeli strikes against Iran began Feb 28, 2026; Iran blocked the Strait of Hormuz, which carries about 20 percent of world oil. AAA reported the national gasoline average rose to $4.50 per gallon, a 50 percent increase, while diesel hit $5.64.

UsNews and World Report

The federal gas tax is 18.4 cents per gallon and diesel tax 24.4 cents, funding over $23 billion a year for the Highway Trust Fund. Loss estimates range from $3.5 billion per month to $17 billion over five months. Consumer savings are projected at 10–12 cents per gallon or about $0.30 weekly.

CNBC

Trump called the holiday “a great idea” for driver relief. Senator Josh Hawley (R-MO) offered a 90-day bill with a possible extension. Senator Mark Kelly (D-AZ) supported it as family aid. Senate Majority Leader John Thune (R-SD) said he will listen, while Senate Minority Leader Chuck Schumer (D-NY) called the cut insufficient.

USA Today

Brian Turmail of the Associated General Contractors of America warned the holiday would “blow a hole” in Highway Trust Fund revenue. The American Trucking Associations, Truckload Carriers Association, and National Tank Truck Carriers noted the tax is collected wholesale, yielding only $0.30 weekly savings and risking infrastructure funding.

CNBC

Revenue loss estimates vary: $3.5 billion per month (Committee for a Responsible Federal Budget) versus $17 billion over five months (Bipartisan Policy Center). Consumer-impact forecasts range from a 10-cent per-gallon drop to negligible effect, with no agreement on suspension length or offset mechanisms.

Trump is floating a gas tax holiday amid rising fuel costs. What does that mean?

• “I think it’s a great idea,” — Donald Trump, President of the United States

The Hill

• “Eighteen cents of gas tax relief a gallon doesn't even come close to the $1.50 gas price increase from this war, and Republicans need to stop pretending that it does,” — Chuck Schumer, Senate Minority Leader, New York

CNBC

• “Without replacement funds, fuel tax revenues supporting critical investments in highway safety and infrastructure projects would evaporate, hindering the safe and efficient movement of people and goods across the country.” — American Trucking Associations, Truckload Carriers Association, and National Tank Truck Carriers

ATA, TCA, & more come out against Trump’s suggested fuel tax holiday in wake of diesel spike

• “The best way to get gas prices to normalize in my view is to get the strait open,” — John Hoeven, Senator, North Dakota

The Hill

Senators Hawley and Kelly have filed bills; the measures sit in committee. Senate leaders Thune and Cornyn have expressed tentative openness but have not scheduled a vote. The outcome will depend on negotiations over Highway Trust Fund offsets and midterm election pressures.

The Hill