MINNEAPOLIS, MN — Drivers in Minnesota are still paying elevated 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 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.
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 Minnesota:
Price per gallon before the war: $2.79
Price per gallon on June 26: $3.66
Price per gallon without federal taxes: $3.47
Price per gallon without federal or state taxes: $3.15
Some states have moved on their own to provide relief at the pump. Georgia, for example, temporarily removed its taxes of 33.3 cents per gallon on gasoline and 37.3 cents per gallon of diesel. Indiana, Kentucky and Utah also made changes.
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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