March 26 (UPI) — President Donald Trump said Thursday his administration has considered suspending the federal gas tax as oil prices climb higher amid the war in Iran.
“It’s something we have in our pocket if we think it’s necessary,” he told reporters during the open portion of a Cabinet meeting at the White House.
The national average cost for a gallon of gasoline was $3.981 on Thursday, and diesel was $5.375, a 33.6% and 43% increase since before the conflict in Iran, AAA reported.
A year ago, those prices were $3.150 and $3.606, respectively. On Feb. 27, the day before the bombing of Iran, they were $2.98 and $3.76.
The rise in fuel prices is a direct response to U.S. and Israeli attacks on Iran, which began Feb. 28 in an effort to limit Iran’s nuclear program. Tehran largely closed the Strait of Hormuz — through which 20% of the world’s oil is transported — to the United States and its allies.
It has become increasingly dangerous to transit the waterway between Iran and Oman amid ongoing violence in the region.
During Thursday’s Cabinet meeting, Trump told reporters that Iran had allowed 10 oil tankers to sail through the Strait of Hormuz as a “present” to the United States amid possible negotiations for a cease-fire. Trump cited a Fox News report for his information.
“They said something’s unusual happening,” he said of the report. “There are eight boats that are going middle of the Hormuz strait — eight big tankers are going loaded up with oil right through, and I said, ‘well, I guess they were right, and they were real, and I think they were Pakistani flagged.’ And I said, ‘well, I guess we’re dealing with the right people.’ “
Trump said Iran allowed an additional two boats to pass through the strait. He told U.S. special envoy Steve Witkoff he hoped he hadn’t “screwed up” talks by mentioning the report.
The Trump administration has already taken steps to try to bring down fuel prices amid the Iran war. On March 18, he issued a 60-day temporary waiver of the 106-year-old maritime law known as the Jones Act.
The Jones Act requires that cargo traveling between U.S. ports be flagged in the United States, be at least 75% owned by U.S. citizens and be at least 75% crewed by U.S. citizens. The act, passed in 1920, was established to grow domestic shipping in the wake of World War I.
Using foreign vessels is expected to cut the transportation costs of fuel by about 5 cents per gallon.
Treasury Secretary Scott Bessent said the United States is also considering lifting sanctions on Iranian oil to slow rising gas prices.
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