The White House may announce a petrol tax holiday [Updated]

Currently, fuel prices in the United States average about $ 5.00 per gallon. However, there are many states where gasoline is well above $ 6.00 per gallon and diesel is running even higher. This has begun to cause havoc in the truck industry. In the truck industry, companies have suspended shipments to renegotiate contracts, infuriating consumers who remember that a gallon of gas was $ 2.17 in the summer of 2020.

Earlier this year Congress and the White House have proposed suspending the federal fuel tax To reduce the financial burden. However, the concept was set back because the prices were relatively low at the time (about $ 3.50 per gallon) and there was growing criticism that this was simply a trade-off for one problem with another. Four months later, the situation looks pretty hopeless, and the Biden administration is revisiting the assumption that it will suspend fuel taxes to mitigate record price hits on pumps.

However, the fuel tax has been fixed at 18.4 cents per gallon for many years, and the suspension falls into a bucket. More precisely, it is literally pushed into the tank. It also effectively forces the government to come up with alternative ways to support the sick road infrastructure in the United States, and stakeholders are wondering where the money comes from. Despite the $ 1.2 trillion infrastructure bill passed, only $ 110 billion of the 2,702-page legislative package is funding bridge and road repairs and improvements. The rest is allocated for public vibrancy, Amtrak financing, improving the country’s energy grid, clean energy initiatives, promoting the adoption of electric vehicles, broadband internet, and water protection. However, the previous $ 300 billion scheduled for the Highway Trust over the next five years is still valid.

The federal gas tax, on the other hand, raises about $ 45 billion annually, accounting for almost all of the federal spending used to build US highways. President Joe Biden recently said he was considering a suspension.

“Yes, I’m considering it,” Biden told reporters on Monday. “I want to make a decision based on the data. I’m looking for it by the weekend.”

The White House is critical of Russia’s invasion of Ukraine and often blames the situation as the main cause of soaring fuel prices. It certainly didn’t help things, but fuel prices began to rise long before a Russian soldier crossed the border. Operated under the assumption that Biden won the 2020 election, the market responded to the proposed environmental policy, Oil prices rise in November of that year.. Fuel prices followed, with the Ukrainian invasion further destabilizing the market.

However, after the COVID blockade pushed demand down and oil began to trade negatively, oil concerns also became cautious about overproduction. In fact, the situation has become so harsh that companies were actually paying for those who could get the surplus fuel because there was no place to store it in 2020.

Going back to the present, the Biden administration has done several things to help normalize pricing. Biden has released some of its strategic oil supply to the market, and the administration will continue to meet with the CEOs of major oil companies to discuss the best ways to manage the situation.according to New York Times, Another meeting is scheduled this week. But nothing seems to be working, and critics argue that the White House’s environmental policies and free government spending are at the heart of what is pushing costs up.

from NYT:

The White House and Congressional Democrats discussed the national petrol tax holiday as one of the few options for lowering pump costs, as external factors were the main factor in the price hike. As the midterm elections approach, the high cost of gas is imminent as a major responsibility for Mr. Biden and Democrats.

When gasoline prices soared in March, the White House turned to strategic petroleum reserves and ordered up to 1 million barrels of oil per day to be released for 180 days in hopes of meeting demand. The overall impact is limited and gas prices remain close to record highs.

Biden said on Monday that his team plans to meet with the CEOs of major oil companies this week. He accused some of the biggest oil companies last week for making a profit while American consumers endured highs.

Given the average fuel economy of US cars, it’s hard to see that a federal fuel tax outage will make a big difference. The average American drives about 14,000 miles a year and owns an average of about 26 miles per gallon. The last number is a bit tricky, as the University of Michigan has abandoned research on the actual average economy of US cars. However, it stopped at around 25 mpg, which was quite stagnant a few years ago, so I’m assuming it has risen a bit since then.

Still, it saves about $ 99 a year and assumes that fuel prices will not rise for the rest of the year. Given that the price of one gallon of gasoline has already skyrocketed, it is unlikely that the driver will actually recover the additional money that had already been put into each tank. Diesel fuel is more expensive (24.4 cents per gallon), but owners of those vehicles still fall into a similar situation.

Given the unprecedented nature of the times, it is difficult to guess what the outcome will be. Your author has recently been relaxing with video games Actual fuel prices in California are currently Cyberpunk 2077 — The game released in 2020 focuses on the global energy crisis, corrupt governance, collapsing infrastructure, rampant corporate impact, habitual street violence, and unprecedented levels of income inequality. It is set in the future of deliberately ridiculous dystopia. The ridiculousness of the real world goes beyond what fiction currently offers and does not signal a hasty scheme designed to temporarily soothe voters. People need realistic and permanent solutions to growing problems, and seriously curbing fuel prices seems a reasonable requirement.

But there is a problem here. US corporate price increases and profits are now at their highest levels since the 1950s. This includes major oil companies (ExxonMobil, BP, Shell, Chevron, etc.) whose gross profit in the first quarter of 2022 tripled compared to the first quarter of 2021. Meanwhile, the Biden administration has repeatedly stated that it wants the United States to move to a renewable state. Energy and all-electric vehicles. Neither group seems to have a vested interest in solving the problem There are concerns about fuel price issues and whether policies will ultimately reflect that.

[Update 6/22/2022: Joe Biden formally asked Congress to suspend the fuel tax for three months on Wednesday. “Today I’m calling on Congress to suspend the Federal gas tax for the next 90 days, through the busy summer season, busy travel season,” he told the press, adding that states could also temporarily pause their own fuel taxes. 

There has been some light criticisms among Democrats, including Rep. Peter DeFazio, chair of the House Committee on Transportation and Infrastructure.

“Although well-intentioned, this policy would at best achieve only minuscule relief while blowing a $10 billion dollar hole in the Highway Trust Fund that would need to be filled if we want to continue to fix crumbling bridges, address the spike in traffic deaths, and build a modern infrastructure system,” DeFazio said in a statement to CBS News. “Furthermore, encouraging state governments to suspend their gas taxes undermines the impact of the Bipartisan Infrastructure Law by reducing funds available to states to spend on infrastructure improvements.”

Though the Biden administration did get the support of its own cabinet. This included U.S. Secretary of Energy Jennifer Granholm, who suggested to the press that the measure would only be part of a large program to help address rising energy costs. However Republicans have predominantly come out against the plan, even going so far to mock it or recalling Barack Obama calling the scheme a “gimmick” when it was pitched by Hillary Clinton during the 2008 presidential campaign.]

[Image: CC7/Shutterstock]

Become a TTAC insider.Get the latest information newsFeatures, TTAC takes, and everything else to reach the truth about the car first Our subscription Newsletter..

The White House may announce a petrol tax holiday [Updated]

Source link The White House may announce a petrol tax holiday [Updated]

Back to top button