Federal Gas Tax Suspension Considered: Here's How Much CA Drivers Would Save

SACRAMENTO, CA — Drivers in California are still paying some of the nation's highest prices at the pump as national debate grows over whether federal and state gas taxes should be temporarily suspended.

The pressure on drivers comes as the war in Iran has disrupted oil markets and pushed gasoline prices — along with consumer goods — higher for much of the spring and early summer. President Donald Trump said this week he intends to temporarily suspend the 18.4-cent per gallon federal gas tax.

In the United States, taxes and fees contribute an average of 51 cents to the price of every gallon of regular gasoline. While the federal government collects an 18.4-cent tax, the remaining portion is composed of various state-level taxes.

Gas Taxes In California

An NBC News analysis looked at how the cost of a gallon of regular gasoline has changed since the war began and how the cost at the pump would change with the suspension of taxes. Here’s how it breaks down in California:

Price per gallon before the war: $4.63
Price per gallon on June 25, 2026: $5.51
Price per gallon without federal taxes: $5.32
Price per gallon without federal or state taxes: $4.62

What Are Californians Saying?

On June 15, Gov. Gavin Newsom said the Iran conflict has created what the International Energy Agency called “the largest supply disruption in the history of the global oil market,” and the California Energy Commission is continuing to monitor supply conditions daily alongside California’s Division of Petroleum Market Oversight and other state agencies.

"American families shouldn’t have to pay the price for Trump’s negligence. That’s why California’s petroleum watchdog is monitoring the market every single day to protect consumers," Newsom said.

What Happens Next?

A federal gas tax holiday would require congressional approval. Democrats in the House and Senate in March proposed measures for a temporary gas tax holiday.

Supporters of a temporary tax holiday say it could help commuters, families and small businesses immediately, especially in places where driving is a necessity. Critics say gas-tax suspensions can drain transportation funding, may not be fully passed along to consumers, and do not address the underlying oil-market disruption.

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