Trump backs temporary US gas tax cut as Iran war pushes fuel prices to near-record highs

US President Donald Trump on Monday said he supports temporarily suspending the federal gasoline tax as American fuel prices surge amid the ongoing Iran war and disruption in oil shipments through the Strait of Hormuz.

Speaking to reporters at the Oval Office, Trump said he wanted to reduce the federal fuel tax to ease pressure on motorists facing sharply higher prices at the pump.

“Yeah, I’m going to reduce,” Trump told reporters when asked whether he would suspend the tax. Asked how long the tax break would remain in place, he replied: “Till it’s appropriate.”

The proposal comes as average gasoline prices in the United States climbed to $4.52 a gallon on Monday, according to AAA, the highest level since 2022.

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Analysts say prices have jumped more than 50 per cent since the Iran war began on February 28.

The federal gasoline tax currently stands at 18.4 cents per gallon, while diesel is taxed at 24.4 cents per gallon. Suspending the levy would require approval from Congress, which is controlled by Trump’s fellow Republicans.

The White House has already taken a series of emergency measures aimed at containing energy prices. Trump’s administration has authorised loans of crude oil from the Strategic Petroleum Reserve and temporarily waived the Jones Act, a shipping law that restricts transport between US ports to American-built and American-operated vessels. The waiver is expected to ease movement of oil, fuel and fertiliser across the United States.

The spike in fuel prices has emerged as a major political challenge for Trump and Republicans ahead of the November midterm elections, with higher petrol and diesel costs also pushing up grocery and transport prices across the US economy.

Trump acknowledged that the federal tax accounts for only a small share of the final price consumers pay at the pump, but argued that “it’s still money.”

The president also ruled out immediate financial support for airlines struggling with surging jet fuel prices. Low-cost carrier Spirit Airlines ceased operations earlier this month, blaming soaring jet fuel costs for derailing its restructuring plans.

Trump also suggested the US could consider renewed military operations to secure shipping routes through the Strait of Hormuz. Referring to earlier maritime security operations, he said Washington could return to “Operation Freedom” or pursue “something much more severe” if needed.

Separately, in a phone interview with CBS News earlier on Monday, Trump said he aimed to suspend the federal gas tax “for a period of time” and described the move as “a great idea”.

“We’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in,” Trump told CBS.

During the interview, Trump rejected the idea of a bailout for US airlines despite mounting pressure from rising jet fuel prices.

“A bailout proposal hasn’t really been presented,” he said. “The airlines are doing not badly.”

Trump also criticised Iran’s latest peace proposal, calling it “totally unacceptable” and “a stupid proposal” that failed to adequately address concerns over Tehran’s nuclear programme.

Asked whether Iran had made any concessions on its nuclear activities, Trump replied: “Yeah, for sure, but not nearly enough.”

With inputs from agencies.