Federal Gas Tax Suspension Floated as Diesel Hits $4.50, 24¢ Cut Eyed

Will suspending the federal gas tax lower diesel prices?

President Trump discussed suspending the federal gas tax May 11, a move that would cut 24.4 cents per gallon from diesel and 18.4 cents from gasoline if Congress approves it. No formal legislation has been introduced as of May 12, but bipartisan support is building as national fuel prices remain elevated: diesel averaging $4.504 per gallon, $1.37 higher than May 2025.

Senators Mark Kelly (D-Arizona) and Richard Blumenthal (D-Connecticut) are sponsoring a bill that would suspend the gas tax through October 1. Republican support includes Senator Josh Hawley (R-Missouri) and Representative Anna Paulina Luna (R-Florida). The suspension would require Congressional approval to take effect.

Why fuel prices remain high despite crude oil dipping

AAA reported that pump prices have reached their highest level since 2022, when the national average peaked at $5.01 per gallon. Crude oil prices dipped below $100 per barrel amid ongoing negotiations to reopen the Strait of Hormuz, but gasoline prices continue to face upward pressure from global supply concerns.

The $1.40 year-over-year increase in pump prices translates to roughly $140 more per 1,000 miles for a truck averaging 6 mpg: an extra $700 per week for a solo driver running 5,000 miles. For a 10-truck fleet, that's $7,000 weekly in additional fuel cost compared to May 2025, before accounting for any fuel surcharge recovery.

What a 24.4¢ diesel tax cut means for settlement statements

If the suspension passes, a truck burning 167 gallons per 1,000 miles (6 mpg) would save $40.75 per thousand miles in federal tax. A driver running 3,000 miles weekly saves $122 per week, or roughly $530 per month through October. A five-truck operation running 15,000 miles weekly saves $611 per week, $2,650 monthly, assuming the full tax cut reaches the pump.

The federal diesel tax funds the Highway Trust Fund, which pays for road maintenance and infrastructure projects. Past suspension proposals have stalled over concerns that cutting the tax depletes the fund without guaranteeing pump price relief, retailers and distributors may capture part of the savings rather than passing the full 24.4 cents to drivers.

Alternative proposals target supply, not tax

Some lawmakers are pushing solutions outside the tax code. Senator John Thune (R-South Dakota) supported efforts to reopen the Strait of Hormuz, a chokepoint for global oil shipments. Senator Rand Paul (R-Kentucky) called for suspending the war with Iran, which has contributed to crude price volatility since hostilities began.

The Strait of Hormuz closure and broader fuel price surge tied to the Iran conflict have kept upward pressure on diesel even as domestic production remains stable. Reopening the strait could ease global supply concerns faster than a tax suspension, but negotiations remain ongoing with no clear timeline.

The bill for small fleets if prices hold through summer

If diesel stays at $4.50 through October and the tax suspension does not pass, a solo owner-operator running 12,000 miles monthly at 6 mpg will spend $9,000 on fuel: $2,740 more than the same period in 2025 at $3.13 per gallon. A 10-truck fleet running 120,000 miles monthly faces $27,400 in additional fuel cost over the five-month period compared to last year.

The tax suspension would recover roughly $488 monthly for that solo driver, $4,880 for the 10-truck fleet: meaningful but not enough to offset the full year-over-year increase. The gap between $4.50 diesel and $3.13 diesel is $1.37 per gallon; the federal tax cut covers 18% of that spread.