Trump suspends gas tax amid fuel price surge: How much revenue will be lost?

United States (U.S.) President Donald Trump has announced plans to suspend federal gas tax for a period of time without sharing details.

In a phone interview with CBS News, the 47th POTUS said, “I think it is a great idea. We are going to take off the gas tax for a period of time, and when the gas goes down, we will let it phase back in.”

The announcement comes amid soaring gas prices in the country due to the ongoing conflict with Iran. 

The closure of the Strait of Hormuz since the start of war on February 28, 2026, have skyrocketed the energy prices across the world.

For context, the Strait of Hormuz is a key energy trade route with around one-fifth of the total world’s oil supply passing through it.

According to AAA, the gas prices since the end of February have increased by 50% and hit a high of $4.52 per gallon on Sunday. Currently, the government receives a tax of:

• 18.4 cents per gallon on gas
• 24.4 cents per gallon on diesel

Experts warn that the suspension of gas tax could cost government upto $500 million per week.

In line with Trump’s remarks, a Republican Senator Josh Hawley announced to introduce the legislation in the Senate, while GOP Representative Anna Paulina Luna of Florida will introduce the bill to remove federal gas tax in the House this week.