The Trump administration is exploring all options to lower the cost of gas, including suspending the federal gas tax, a top official said.
Gas prices have soared more than 50 per cent since the US-Israel strikes on Iran began on February 28. It hit a national average of $4.52 per gallon on Sunday, according to data from motor club AAA, CNBC reported.
“All measures that can be taken to lower the price at the pump and lower the prices for Americans, this administration is in support of,” Energy Secretary Chris Wright told NBC News’ “Meet the Press” on Sunday. Wright was responding to a query on whether he would support suspending the federal gas tax.
The federal gas tax is about 18 cents a gallon. Wright said the administration is open to all ideas, adding, “Everything has trade-offs.”
Energy prices across the globe has soared after the escalation of tensions in the Middle East following the war on Iran. The Islamic Republic has stepped up its control of the Strait of Hormuz, a crucial choke point. Before the war began, nearly a fifth of the global oil and liquified natural gas supplies passed through the Strait.
While reopening the Strait is a stated objective of US President Donald Trump, Iran has sought to control transit of vessels through the passage. The US is carrying out a blockade of ships transiting to and from Iranian ports through the Strait.
But the rise in gas prices has worried the US administration, ahead of the crucial mid-term election in September. Democrats in the Congress have sought to whip up support to their affordability plank by introducing a bill in March to temporarily suspend federal gas tax until October.
Wright refused to be drawn into a speculation on whether the average gas prices, a key political issue especially during the election year, will touch $5 per gallon.
“I can’t predict the price of energy in the short term or even the medium term, but what we’re doing is ending a 47-year conflict Iran has fought,” the top US energy aide said.
Wright said he is skipping the “price predictions,” adding the “US is in a tremendous position,” a reference to the country’s production of oil and natural gas. In March, Wright had hinted at the possibility of US oil prices sliding below $3 per gallon.
The US-Israel war on Iran has resulted in higher oil prices, mainly due to supply disruptions through the Strait of Hormuz. The US has launched an initiative earlier this month to escort vessels through the Strait, but later paused it.
Wright was also asked if Project Freedom, the US initiative to ensure safe passage of oil vessels through the Strait, would resume.
The US Energy Secretary said right now the economic pressure on Iran is “increasing dramatically.” He said the US will be forced tp take up military measures to reopen the Strait of Hormuz if a negotiated settlement is not arising soon.
Project Freedom was suspended citing progress in talks with Iran, but media reports indicated attacks on US Navy ships and merchant vessels prompted a pause by Washington.
Discussions are still on between Iran and the US to reach a negotiated settlement, with the Islamic Republic on Sunday conveying its response to a US proposal to end the conflict.
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