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President Joe Biden will ask Congress on Wednesday to suspend the federal gas tax until September as Americans across the country struggle with rising prices like a pump.
The president will call on members of Congress to introduce a three-month vacation for the federal gas tax without taking money from the Highway Trust Fund, which finances highways and public transportation.
Gas prices have risen 50% across the country in the last year. (Getty Images / Getty Images)
“I want to be very clear, the president is urging Congress to take this step to help American families without harming the Trust Trust Fund, which is funded by these taxes,” a senior administration official said Tuesday night.
The official suggested that the federal government’s budget deficit, shrinking by $ 1.6 trillion this year, would allow the United States to suspend the gas tax while using other revenues to make the Highway Trust Fund worth about $ 10 billion. .
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The federal government currently charges 18 cents per gallon of gasoline and imposes a 20 percent tax on every gallon of diesel, the official said.
Biden will also call on states, oil companies and retailers to suspend gas taxes. Penn Wharton’s budget model released estimates Wednesday that reveal gas tax holidays in Georgia, Maryland and Connecticut are saving money for pump users. Most of the savings in these areas went to consumers instead of gas stations and others in the energy sector.
The price of gas began to rise last fall and continued to rise after that of Russia invasion of Ukraine in late February, although the administration described the increase in gas prices as a “rise in Putin’s prices”.
“[Biden] believes that the states, oil companies and retailers have a responsibility in this unique moment – to do their part to improve Putin’s rising prices, “he said. to deliver the same benefits as consumer discounts or rebates. “
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Gasoline prices are hovering around $ 4.00 a gallon for the cheapest class at several gas stations in the nation’s capital on April 11, 2022 in Washington, DC. (Photo of Chomodeville Chip / Getty Images / Getty Images)
The official went on to say that the president was urging the gas industry and oil traders to reduce the price of gas as oil prices began to fall.
“He also calls on the industry to use its record profits and increase supplies and more refining capacity to reduce gas prices, and in particular calls on large oil refineries to come to the table with concrete solutions when the energy minister convenes them. later this week, “the official said.
“And when the price of oil falls, as has happened in the last few weeks, the president is urging retailers to properly reduce their prices and pass on savings to consumers,” he said.
The average national value per gallon of gas is currently close to $ 5. Prior to that year, the highest national average gas price ever recorded by the AAA was $ 4,114 per gallon in July 2008.
The president accused oil refineries of raising gas prices in letters sent last week to seven refinery operators, including Chevron, ExxonMobil and BP. But oil refiners said their ability to produce extra gas and diesel was limited.
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Fuel Prices at Chevron Station in San Francisco, California, USA, Thursday, June 9, 2022 (David Paul Morris / Bloomberg via Getty Images / Getty Images)
The U.S. Petroleum Institute and U.S. fuel and petrochemical producers sent a joint letter to Biden last week saying refineries were already operating near their maximum capacity and nearly half of the off-line capacity was due to the conversion of facilities to production. of renewable energy.
And Chevron CEO Michael Wirth wrote a letter to Biden on Tuesday stating that the company works every day to “help provide the world with the energy it needs and raise the lives of billions of people who rely on them.” deliveries’.
He continued: “Despite these efforts, your administration is largely seeking to criticize and sometimes denigrate our industry. These actions are not helpful in meeting the challenges we face and are not what the American people are. deserves it. ”
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Energy Secretary Jennifer Granholm will meet with the top seven refineries later this week on how the federal government can help increase refining capacity.
Biden’s former boss, former President Barack Obama, called the gas tax a “trick” during the 2008 election campaign. the summer so that MPs can “say they have done something”.
There are also concerns about the impact of the gas tax holiday on already record high inflation. Committee on Responsible Federal Budget, a non-partisan group advocating for a reduction in the federal budget, before disputes that a 10-month tax suspension could in fact increase demand for petrol and other goods and services when the economy is already facing high consumer demand and supply disruptions caused by a pandemic.
Although a gas tax holiday could reduce pump prices, it will further increase demand for petrol and other goods and services at a time when the economy has little capacity to absorb it, the blog post said. “The result could be even higher. inflation rates in 2023
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