Biden mulling possibility of federal gas tax holiday

President hopes to decide by end of week on move to help motorists at pump

REHOBOTH BEACH, Del. — President Joe Biden said Monday that he’s considering a federal holiday on the gasoline tax, possibly saving U.S. consumers as much as 18.4 cents a gallon.

“Yes, I’m considering it,” Biden told reporters after taking a walk along the beach near his vacation home in Delaware. “I hope to have a decision based on the data — I’m looking for by the end of the week.”

The administration is increasingly looking for ways to spare the public from higher prices at the pump, which began to climb last year and surged after Russia invaded Ukraine in February. Gas prices nationwide are averaging just under $5 a gallon, according to AAA.

Biden said members of his team were to meet this week with CEOs of the major oil companies to discuss rising oil prices. Biden lashed out at oil companies, saying they are making excessive profits when people are feeling the crunch of skyrocketing costs at the pump and inflation.

“I want an explanation for why they aren’t refining more oil,” Biden said.

The Biden administration has already released oil from the U.S. strategic reserve and increased ethanol blending for the summer, in additional to sending a letter last week to oil refiners urging them to increase their refining capacity. Yet those efforts have yet to reduce price pressures meaningfully, such that the administration is now considering a gas tax holiday. Taxes on gasoline and diesel fuel help pay for highways.

The Penn Wharton Budget Model released estimates Wednesday showing that consumers saved at the pump because of gas tax holidays in Connecticut, Georgia and Maryland.

In an interview Sunday on ABC’s “This Week,” Treasury Secretary Janet Yellen expressed an openness to a federal gas tax holiday to give motorists some relief.

Oil refiners say their ability to produce additional gas and diesel fuel is limited, meaning that prices could remain high unless demand starts to wane.

The American Petroleum Institute and American Fuel & Petrochemical Manufacturers sent a joint letter to Biden on Wednesday that said refineries are operating near their maximum capacity already and nearly half of the capacity taken off line was due to the facilities converting to renewable fuel production.

Last week, the Federal Reserve stepped up its drive to tame inflation by raising its key interest rate by three-quarters of a point — its largest increase in nearly three decades — and signaled more large rate increases to come.

Former Treasury Secretary Larry Summers told NBC’s “Meet the Press” on Sunday that in his estimation, “the dominant probability would be that by the end of next year we would be seeing a recession in the American economy.”

Biden said he spoke with Summers, who served as treasury secretary in the Clinton administration, on Monday.

“There’s nothing inevitable about a recession,” Biden said.