Gas tax holiday talk returns as Richmond prices rise
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The gasoline price surge is reigniting political chatter about suspending the federal tax on the fuel, thanks to a recent round of populist proposals from some high-profile Democrats.
Why it matters: Average gas prices in Richmond have jumped by more than $1 a gallon since the conflict with Iran began over two months ago.
State of play: Pump costs are spiking anew everywhere this week — and more increases are looming.
- The average price per gallon in Richmond hit $4.23 on Tuesday and $4.48 nationwide, per AAA.
- That's up from the under $3 a gallon Richmonders were paying before the Iran war sent global fuel prices surging.
Flashback: Richmond's highest gas price recorded was $4.93 a gallon in June 2022.
Zoom in: In response to surging prices, a handful of high-profile Democratic politicians propose suspending the 18.3-cent-per-gallon gas tax and 24.3-cent diesel tax, which support the nation's Highway Trust Fund.
- The Bipartisan Policy Center estimated that suspending the tax could cut retail prices by 9%-14% per gallon.
Between the lines: The federal holiday is separate from a proposal state Republican lawmakers floated in March to give Virginians a 90-day reprieve from the state's roughly 32-cent-per-gallon gas tax.
Reality check: Federal and state gas tax holidays are one of those go-to ideas that never actually happens, but often surfaces when prices climb.
- The state proposal never went anywhere, and Congress would have to approve a federal suspension of the gas tax, and so far, it never has.
- Plus, tax holidays, depending on the duration, would slash revenue used for maintaining the state's and nation's highways, the chief criticism of the proposal.
The bottom line: Pump pain is unlikely to go away anytime soon. Maybe 2026 will be the year of the hike?