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

Debate has intensified over the proposal to temporarily suspend federal and state gas taxes and drivers in Pennsylvania continue to pay heavy prices at the pump.

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.

Gas Taxes In Pennsylvania

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 Pennsylvania:

Price per gallon before the war: $3.13
Price per gallon on June 25: $4.05
Price per gallon without federal taxes: $3.88
Price per gallon without federal or state taxes: $3.57

In nearby New Jersey, prices are currently cheaper, sitting at $3.82 per gall on June 25.

What Are Pennsylvanians Saying?

Pennsylvania currently maintains the nation's third-highest state gasoline tax, trailing only California and Illinois.

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.

Pennsylvania has proposed gas tax "holidays," including House Bill 2396 and Senate Bill 1293.

These bills would call for a suspension of anywhere from 60 days to 6 months on the state gas tax. They've faced some controversy over how they would defund the State Motor License Fund, however.

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.