Trump seeks pause of federal gas tax through 2026 amid Iran risk

President Trump is proposing a temporary suspension of the 18.4-cent federal gasoline tax through Oct. 1, 2026. The administration says the pause would provide immediate relief to households facing higher retail fuel costs as tensions involving Iran pressure global oil markets.

The federal gasoline tax feeds the Highway Trust Fund, which finances road construction, bridge repair and public transit projects. Suspending the levy would remove about $500 million a week from that fund, according to administration estimates. That shortfall would need to be covered by transfers from other federal accounts, increased borrowing, or reduced infrastructure spending.

The national average price for a gallon of regular gasoline is about $4.52; in California the average is roughly $6.15 a gallon. Officials cite rising tensions related to Iran and threats to shipping through the Strait of Hormuz as factors that can tighten supply, lift crude prices and push up retail fuel costs.

Critics contend there is no guarantee the full tax reduction would reach drivers, since refiners and retailers can retain part of the savings through higher margins. They also warn that reduced funding for the Highway Trust Fund could delay maintenance and capital projects, increase long-term repair costs and raise safety concerns.

Similar proposals surfaced during the 2022 energy price spike. Analysts and congressional staff say repeated pauses would add pressure to transportation budgets and prompt discussion of alternative revenue sources, including mileage-based user fees, redirecting general fund dollars or issuing debt to preserve road and transit programs.

The White House is seeking bipartisan support and frames the proposal as relief for household budgets. Congress must act for the pause to take effect; lawmakers are set to review the plan and its budget implications in the coming weeks.