US President Joe Biden called for a temporary suspension of the federal tax on gasoline on Wednesday, intensifying his efforts to limit the rise in fuel prices at the pump.
More specifically, the proposal submitted to Congress by Biden provides for the suspension of the federal tax on gasoline and diesel for three months, a period that coincides with the summer period in the US. Today, the federal tax on gasoline is 18 cents per gallon, while the diesel tax is 24 cents per gallon.
Biden’s proposal comes at a time when American consumers, like millions of people around the world, are seeing their incomes squeezed by rapidly rising inflation and rising prices for a variety of products. However, the rise in gasoline prices is perhaps the most noticeable, with the average US price exceeding $ 5 a gallon for the first time in history earlier this month, which has become a headache for the Biden government in view of in fact in the November by-elections.
Experts, however, are skeptical of the US president’s proposal, noting that it could offer some immediate relief to drivers, but on the other hand it could also keep demand high, thus exacerbating tight supply, while adding: that the extent to which any tax suspension on the pump will be felt will depend on whether wholesale prices remain stable.
They cite New York as an example, where the government suspended the tax on gasoline at a time when wholesale fuel prices were rising, easing the impact on consumers’ wallets as lower taxation was offset by rising wholesale prices.
In any case, Biden is not sure he will secure congressional support for a three-month proposal to suspend federal taxes on petrol and diesel.
Source: Capital
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