Relief to Americans: These states are suspending gas taxes

As per AAA's reporting, gas prices set a new peak in mid-March, with the nationwide average reaching $4.33 per gallon of regular unleaded gasoline and more than $5.13 for diesel. Although national average gas prices have decreased marginally ever since they keep rising. Moreover, average costs in several states exceeded $5 per gallon.

Gas prices were rising even before Russia invaded Ukraine, as demand surged and pandemic-related limitations were relaxed. However, nations shifted away from Russia, which is one of the world's top oil-producing nations, as a result of the incursion.

The Biden administration said earlier this month that it would release 30 million barrels of crude oil from the Strategic Petroleum Reserve in a coordinated effort with partners to lower global energy prices. It follows a similar 50 million gallon discharge last October.


Several Congress members have also proposed suspending the federal gas tax, which is slightly over 18 cents per gallon for gasoline and 24 cents per gallon for diesel, but this has been greeted with bipartisan opposition, with some politicians dismissing the proposal as a "marketing ploy." While the Biden administration has left the possibility of a gas tax holiday open, several officials have expressed reservations about whether businesses would truly pass the savings on to consumers.

Each state has its own gas taxes and surcharges. According to the American Petroleum Institute, statewide gas taxes and levies totalled 38.69 cents per gallon at the beginning of this year. In an effort to help consumers, some governments have already started to postpone gasoline taxes.

Abandoning gas taxes might bring some relief, but it is not the optimum efficient tax relief, according to Ulrik Boesen, director of excise tax policy at the Tax Foundation.

According to Boesen, there are numerous chances for other groups to profit from the savings before they reach the consumers at the pump, thus the true relief depends on how states tackle the issue.